A while ago, I ran the Add Birthday to iCal AppleScript to get the birthdays that are listed in my Address Book into a Calendar in iCal. I just discovered that this has been added to iCal itself.
There is a new option labeled "Show Birthdays calendar". When this is selected a new calendar is created with all of the birthdays from your Address Book. You can even share this calendar so other people can have access to this.
I am guessing that this was added in 10.4.