Regarding the voltage regulator on the cable, this is very possible. I know that when I purchase the Spidermite from the factory I have the option of buying a cable with built in regulation.
When I've hacked the Spidermite into a flyable system, I've tacked an LM2940 onto the back of the transmitter case. Not sure if this is the brightest idea, as I'm dumping the regulator heat onto the tx, but it makes for a compact installation and I haven't burned the tx up yet. Good airflow is a must.
Do be sure to look at the different package sizes available for the LM2940. The smaller the better, since a "full size" TO220 regulator will dwarf the transmitter! If you have a little SMD experience, the SOT223 is nice and small. A heat sink is critical on this package since the tab is very small.
If you do happen to blow up your transmitter, consider moving up to a 50mw or 200mw transmitter. The size is not that much larger, they run on 5v, and the firebird should be able to carry them. Both come with a nice little receiver with detachable antenna, great for when you want to put your big-honkin' high gain antenna on and fly out of sight
I still need to get the 50mw unit listed on my site.