The 100-400 is an awesome lens for bird photography. it's my go-to lens, and I do about 90% of my nature work with it. Works well carrying it around and is pretty fast and flexible. I work with a crop sensor, primarily a 7d, and I recommend a crop sensor for bird photography for the magnification it brings. the 7D is a killer body for this use.

When I'm working off of a tripod, I tend to use a 300/F4 and a 1.4x Teleconverter. It's a little sharper and a small bit more powerful than the 100-400 @400mm.

You will find that 400mm is not powerful enough at times; I do wish a lot for 400mm or 500mm lens, especially one I can slap a 1.4x tele on. The cost difference going from 300m to 400mm is prohibitive for me right now, so I make do. You can do quite well with the 100-400.

(just back from a trip shooting at a refuge; this was primarily shot with the 300/1.4x combo on the 7d: http://www.chuqui.com/2010/10/dawn-patrol/; here's a shot taken with the 100-400 from earlier this year: http://www.flickr.com/photos/chuqui/4980414951/ )

So I highly recommend the 100-400 as a good lens for this. The 300/F4 and 1.4x is another option to consider and probably a bit less expensive. You can buy BOTH for less than a 400mm or 50mm would cost, so they're good lenses for getting going here without committing to a mortgage. But trust me, if you catch the bug for bird photography, at some point, you'll be budgeting for ever bigger and more powerful lenses...