The general practice seems to be to add 4 NiMH batteries.
Those are to be charged at around 1.5V per cell which totals to the 6V officially available from a dynohub. From what I have read, those NiMHs handle this pretty well.
On the other hand, they output 1.2V so you can directly connect them to any USB device (I do this myself to extend the battery run time of my car GPS on the bicycle for the moment or when hiking and it works pretty well).
The batteries will smooth out the power from the hub, but the problem is that it is hard to impossible to guess how far those NiMHs are charged. My GPS incorporates a battery status indicator, so I can easily see how far I'm in the process and when I need to unplug it from the charger.
What I'm hoping for is that I would be able to charge the GPS at normal flat road cycling speeds from the hub. Then when climbing the bigger Alps passes, I would disconnect the hub to minimize any resistance and charge the GPS from a pack of 4 NiMHs. When going downhill at high speed, I would run the GPS from its own battery (too risky to attach it to the charger then), but I would use the charger to juice up the 4 NiMH (for free). NiMHs are cheap so I'm less stressed about frying those a bit.
I just hope that someone can confirm that I can connect a standard USB device to a hub at normal cycling speed without over-currenting it (this would mean powering it at over 500mah).