the 70-200 f4 is one of the true bargains in the canon range and would be a very worthwhile investment for both bigger birds like herons and for portraits. On 1.6x crop it is a little awkward focal length for portraits until you get used to it but it is certainly sharp enough, I would go for the stabilised version though. The f2.8 version is a bit unwieldy on a rebel body, it works fine if you went for a 40/50/7/5/1D body though. The 1Ds mark II is now going for similar money used as a new crop body but will blow the rebel out of the water unless you need more than iso 1600.
Something that will help your birds pop a bit more is to use a speedlight with a better beamer on to light it up a little.