The theory would be that the switcher can output some 7.1-7.5 VDC. The heat dissipation is very small, and the capacitors used by the 7805 plus the regulation of the 7805 will somewhat smooth out the 60kHz switching noise that this particular switcher emits at its' switching frequency. The switcher data sheet also lists a variant with lower noise using an extra, small inductor attached to the output.
Add a garden variety 60kHz filter before the input of the 7805 and we're golden. Also, there is a good trick in AoE by Horowitz/Hill where they insert a 4001 diode (which is strictly for output polarity protection) between Vout and Vadj in parallel with a small resistor, 10uF to GND and a 5k trimmer to GND for improved ripple rejection. It's on page 386 in the 2nd edition, but I'm too lazy to draw up a complete schematic at this late hour :sleep:
It's not impossible to come up with a low-noise switcher as long as you know what you're doing and can tolerate the somewhat higher component count. Hint, commercial switching PSUs are normally optimized for cost, thus low component count and therefore they are :nuke: I used the AoE trick above for a very low noise toroid/LM317/337 solution that has good performance at a low component count. The switcher is the research part here.
I'm about to slap the above together as an alternative to a seriously old c64 PSU in any event, so I'll report my impressions in due time.