[BrianG]

Good answer newe! :)

To add to what he said, the BEC in the ESC is "linear" and can generate a lot of heat depending on load (servos) and main cell count.

And the term "BEC" just means "Battery Eliminator Circuit". The "U" in UBEC is "Universal". Really, the terms BEC and UBEC are interchangable, but when the people here say "BEC", they usually are referring to the ESC integrated one, while if they say "UBEC", they mean the external switching one.

The capacitor is not required, but it does help filter noise out from the power lead, which may help stop potential glitching. And, it also provides a little extra current boost if the servo(s) need it (especially when they begin moving from a stop).

And thanks for the comments. :)