I am an enthusiastic amateur photographer and have a Canon 350 D that I bought about 5 years back. I use this with a Tamron 17-50 2.8 lens, a Canon 50 mm 1.8 mm lens and a Canon 70-200 f 4.0 L lens (with a Canon 1.4 X extender). I like to do some bird photography and also landscapes. I am wondering if my camera body is dated now and if that is the limiting factor for the quality of images that I get from my telephoto L lens. How much improvement in image quality can I expect if I upgrade to EOS 550 D (which I can afford now)? Will the newer sensor and larger number of pixels translate into a noticeable improvement in image quality?
The difference can be huge or unnoticeable depending on how you use the camera - for example, the faster burst rate means nothing if you never use burst mode or can make a huge difference if you always shoot in burst mode - also better low light performance means nothing if you always shoot in bright sunlight.
You shouldn't be asking if the camera body is a limiting factor - you should be asking yourself what it is you don't like about your photos and then ask here how to fix the problem (and most likely the way to fix the specific problem does not require a new camera body).
But buying equipment is fun, you can always use the specs to rationalize buying a new body - just think of that wonderful full HD video of birds in flight you can make with the 550D (Important note: I believe shooting video of birds in flight with a DSLR is insanely difficult)
BTW: I have the 550D and I love it, I use it mostly indoors at higher ISO than people here are usually comfortable with and it produces great pictures.
Snapsort shows a clear comparison of the tech specs of both cameras. To highlight a few of the advantages of the 550D over your 350D (in no particular order):
The main benefit seems to be the higher resolution that will allow you more room to crop photos of birds.
A slightly faster burst rate, hi-res screen, better low light performance and video capabilities are additional benefits.
For what it's worth, I too have a 350D. It's a great camera.
Oddly - even though many newer, better cameras have come out since I first received it back in 2006 - my 350D hasn't started taking worse pictures over the years. I'm not sure why that is - it surely couldn't be that the marketing for all the new cameras is misleading??
My other camera is a 5DmkII, but I still love the images I get with my 350D.
My advice: only upgrade if you have a specific need.