added a 470 to the input side of the 7805, a 10 to the output side a couple of 10uf tantalum caps to the PIC and a 470 close to the 555 timer.
changed the code in the pic to flash the decimal point twice before the loop (which counts from 0-9) and everything is working well, no random restarts and the seven seg is quite a bit brighter than before. I wonder if is also has to do with the different PIC on the breadboard. Went from a 876a to a 877. I can't program the first one anymore, might have fried something. With no decoupling caps, guess i'm not surprised.
thanks for all the help gents!