To get the birthdays of your contacts in Address Book to show up in previous versions of iCal, I had used a little tool which took all those dates and made a recurring event in iCal. Annoying, since I had to run an application everytime I added a birthday.
I just found that in 10.4, this is no longer needed. In the iCal preferences just check the Show Birthdays Calendar checkbox. This made a new calender show up in iCal with all birthdays of the people in my Address Book. The events cannot be edited, and the information pane has a link to the contact's card.
A welcome new feature if you ask me. There is room for improvement, though, as it would be nice to have the birth year or age added, and it would be nice to be able to set a reminder or what not.

