LDOs drop the difference in voltage as heat, yes - hence the voltage difference between input and output determines the efficiency (eg a 3.0v LDO fed by 6.0v is 50% efficient).

In many cases where LDOs are used in designs the amount of lost power is negligible as the current being drawn is so small - simply not worth using a switcher for that rail. Also, LDOs typically have cleaner output so often an LDO is used to isolate an analog subsystem from noise on the main (digital) system rails.

The purple boxed chip is a 12 to 24 bit multiplexed D-type latch: http://focus.ti.com/docs/prod/folders/pr...

Probably the address buffer for the NOR flash allowing a large device to be mapped into a small address window.