The Arduino Nano is a small, complete, and breadboard-friendly board based on the ATmega328. It has more or less the same functionality of the Arduino Uno, but in a different package. It lacks only a DC power jack, and works with a Mini-B USB cable instead of a standard one.
The Arduino Nano can be powered via the Mini-B USB connection, 6-20V unregulated external power supply (pin 30), or 5V regulated external power supply (pin 27). The power source is automatically selected to the highest voltage source.
The FTDI FT232RL chip on the Nano is only powered if the board is being powered over USB. As a result, when running on external (non-USB) power, the 3.3V output (which is supplied by the FTDI chip) is not available. The RX and TX LEDs on the board will flash when data is being transmitted via the FTDI chip and USB connection to the computer (but not for serial communication on pins 0 and 1).