dealing with the bird defense

The one book I have suggests that when the bird defense is used the best plan of action is to accept the knight trade.  I however played Nc3 in a game recently, which takes advantage of blacks move to get ahead in development.  I think this move is just as good or better than playing into blacks hand...  thoughts?

That isn't birds defence, that is Ruy Lopez (spanish opening) And even pretty badly done. What on earth blacks night thibnks his doing in d4?

Birds defence is 1.. f4

This is Bird's Defence to the Ruy Lopez. 1 f4 is Bird's Opening and generally 1....f5 is the Dutch Defence.

http://www.chessgames.com/perl/chessopening?eco=C61

 bzzt! wrong answer. This is in fact the Bird's defense of the Ruy Lopez (while Bird's "opening" is 1. f4), and is one of the lesser played lines. Although I have no experince in this defense, the knight on d4 looks to lead to a few exchanges (which are usually good for the second player) and makes way for the c pawn to hit the bishop.

<Feller> i guess its ok, but I'm assuming black would be content with the bishop pair.

1. e4 e5 2. Nf3 Nc6 3. Bb5 Nd4 4. Nc3 Nxb5 5. Nxb5 c6 and black looks well off. 

This opening is a variation of the Ruy Lopez (or Spanish) called the 'Birds Defence'. Its ECO code is C61. In NCO`s introduction to the Ruy Lopez, it informs us that his line for black is not as popular at top level nowadays as it once was. This! does not mean us average joes can overlook it.

 
Lets put this into perspective, Henry Bird`s name is attached to the variation but others who have used it are: Staunton, Blackbourne, Nimzowitch, Alekhine, Tarrash (early 1900s) / Benko, Bagirov, Spassky, Dzindzi (mid 1950-80s) / Ivanchuk, Morozevich, Flear (90s-07). To be honest, there are alot of well respected names who have used it so dont let this 'short' list fool you. If these players have played it, it obviously has depth.

I recently started looking at this line myself from Blacks perspective and it is really appealing as it allows a shortcut to theory. It deviates early and could catch some people off guard. This already proved true because some people have already mentioned in this thread that they dont know what black is doing!

4.Nxd4 is almost always played and is the line given in NCO. I dont think White should be too upset about having to face this line but certainly would be uncomfortable to play if you never seen it before. After 4.Nxd4, White gets castled and has a space advantage on the kingside and always has the idea of f4. Black is going to expand on the queenside and annoy whites light square bishop (which is bad) and try to get ...d5 in at the right moment. Blacks bishop on c5 is also 'bad'.  

It is difficult to sum things up on an opening variation since there are many possibilities but i think you will have an interesting game using this opening. For Black, it is attractive because it cuts down on theory and white will probably be happy enough not to come across other lines such as the berlin defence. White could always have a go at deviating at move 4 to catch black off guard but i think there is nothing wrong with the main lines for either side. 

giving up the pawn formation must be bad..but exchanging a knight is good.but black is giving a tempo too I think.so it must be wrong.

 Its not 'wrong'. It is a very fine and interesting line for black. An early ...h5 and rook lift looks like a cool idea too (played by Morozevich and Bird [pre 1900!])

I have not played many games using this line as i only took an interest in it as black not so long ago. Has anyone had any hands on experience with the line?  

The idea is fine...the tempo issue...well lets see - isn't White going to have to move his bishop again?  The tempo is evident with a move like Bb5...Bird knew that his "tempo loss" was justified.  The opening is playable.  It takes the Ruy Lopez player out of opening quickly, which is good for the creative player.  And, the pawn on d4 helps with Black's pawn wall push on the queenside.  All in all, the choice is not a bad one.  If you ever aren't sure about an idea, try it about 10 times and see what you think - always try to cook up new ideas...and see if you like it.

I played that defense to the Spanish game several times in tournament play back in the 1980s.  Won some lost some.

White does have to stay on his toes.  And indeed 3.Bb5 does torn out to be a lost tempo for White as after 3. ...Nd4 White's bishop is biting on nothing.

Black does have an opportunity for a Queenside expansion but it doesn't have to involve a pawn wal unless you wan it.  More than once I  castled Queenside because that's where my attack was.  Also, Black has the opportunity of O-O-O earlier than O-O more often than not.

White had a disadvantage that the two pieces he developed early are 1. gone, or 2. serving no purpose.  While his Q-side pieces are going to have trouble getting into play.

For years this D to the Ruy has been disparaged, yet it keep popping up in master play enough to have me thinking there must be something there.  At the club level it's a lot of fun if nothing else.

In 1981 McFarland Press released Bird's Defense to the Ruy Lopez by Andy Soltis and Gene H. McCormick.  I'm sure it's out of print but you may be able to find a copy if you look around on the net.  PGN Mentor's web site had a database of games using this D.