For your wife, ISO 800 to ISO 1600 are probably correct, given that she photographs birds. Photographing birds is very difficult, particularly those in flight, with the 450D. It does not have very great AF (autofocus), and bird photography generally requires very long lenses (400mm telephoto is about the shortest focal length one should use when photographing birds, with 500mm or greater more ideal.)

Even with a telephoto lens, one has to get very close to a bird to get a frame-filling shot. The problem is that telephoto lenses are extremely expensive to get in the "fast" variety of f/2.8. Most are f/4 or slower, which makes it difficult to snap motion-freezing shots as the shutter is just too slow (sometimes even WITH image stabilization.)

I have the 450D myself, with the Canon EF 100-400mm f/4.5-5.6 IS lens. This is a great lens, but the maximum aperture (f/5.6 at 400mm) is just not fast enough to freeze birds, even those that are not in flight (a bird never rests, they are always flitting about, preening, or doing something involving motion.) At ISO 800-1600 with IS, I figure I'm about 1-1.5 stops too slow to get decent bird shots in good lighting.

Sadly, the 450D's ISO performance beyond ISO 400 is pretty bad, and produces a lot of noise. For bird photography, a FAR better camera is the 7D. It has one of the most advanced AF systems available these days, and supports ISO up to 6400. I recently had the chance to use another bird photographers 7D at Cherry Creek State Park in Colorado near my home. Using the 7D at ISO 3200 with a Canon EF 400mm f/4 lens, it was a WORLD of difference compared to the 450D at ISO 1600. The better AF snapped right onto birds in flight with ease, and the better ISO performance allowed a high shutter speed even at sunset, without terrible noise. (Noise on the 7D@3200 was better than the 450D@1600.) The 7D also has an edge from a cropping standpoint, with its 18mp sensor. Even if you don't get a frame-filling shot, you have plenty of room to crop down with an 18mp image, 50% more so than with the 12mp sensor of the 450D.

So, to summarize, it is not surprising your wife uses ISO 1600 for her bird photography, given the shortcomings of the 450D's AF system, and the inherent difficulties in bird photography in general. I am also not surprised she uses auto mode for everything else, as when you are out photographing birds, you are almost entirely consumed with creeping up on them without scaring them off, and you want your camera to be adaptable to any situation. By letting the camera pick the shutter and aperture, you don't have to bother with it yourself. I usually use P (program) mode myself when doing bird photography. I have basic exposure compensation control in that mode, which lets me take some control if and when I need it, without having to think too hard.

If your wife were to upgrade (or you were to get her an awesoem gift), the new 550D, or the 7D, would make a much better choice. The 550D goes for some $750 without a lens, while the 7D goes for $1500 without a lens. The extra cost of the 7D is definitely worth it for a bird photographer given its fantastic AF system, if you can afford it. The 60D sits in an odd spot for bird photography. At a price point of $1100 or so, it may be a better buy than the 550D (it might be a toss up), but is a very short cry from the 7D in price. The 7D wins hands down it in every way over the 60D (outside of maybe the 60D's fancy swivel screen.) If you were to upgrade to a better camera body, I would ignore the 60D and decide between the 550D and the 7D.