As Scampo has said, I have had 2 wonderful birding holidays on the Algarve and have many wonderful tales to tell.
First of all there is one Algarve trip report in the forum already. Click onto this link to see it:
http://www.birdtours.co.uk/tripreports/portugal/index.htm
Also click into this link to see quite a few more reports from various birders that have been there:
http://www.birdtours.co.uk/tripreports/portugal/index.htm
Regarding books, I have an old one which I found quite useful, although I do tend to find my own places. The book in question covers both Spain and Portugal.
The title is: Where to watch birds in Spain and Portugal by Laurence Rose (whom I have met). The ISBN No is:
0-600-58404-6
BTW how long are you going for and what dates are you going and where are you staying on the Algarve plus how much travelling are you willing to put in? All necessary questions to allow the right answers to be given.
I can possibly give you sites that could get you good birds but you might have to do some travelling to see them. Likewise there are many good sites on the Algarve itself.
Some site's worth mentioning are the Castro Verde area (about 40 miles due north of Albufeira) for Great & Little Bustard, Montague Harrier (plenty of these), Lesser Kestrel, Short-toed Eagle, Black Kite, Roller, Calandra Lark, Short toed Lark, Spanish Sparrow, Spotless Starling, Black eared Wheatear, Nightingale, Great reed Warbler & White Stork. Also here (but I have missed each time, are Black shouldered Kite.
Ria Formosa (situated between Almansil and Montenegro at the Quina do Lago golfing complex) you can get Purple Gallinule, Common Waxbill, Azure winged Magpie, Hoopoe, Little Bittern, Purple Heron, Greater Flamingo, Short toed Treecreeper, Red crested Porchard, Marsh Harrier, Avocet, Black winged Stilt, Black Tern and out on the tidal creek can be found many waders.
Castro Marim (on the Portugese / Spanish border - almost under the bridge that spans the river Guadiana) similar to the species at Ria formosa plus Spectacled Warbler and Black necked Grebe, Dartford Warbler, Pratincoles, plus I actually found a Little Bustard nearby. On passage there are possibilities of Night, Squacco and Purple Herons, Black Stork and many more. This can be a very productive area given the right conditions.
Alvor Estuary (situated south of Mexilhoiera Grande). Also there is (or was when I was last there) a ringing station called the A Rocha Centre that will let you attend one of their ringing sessions. Normally you have to ring to book your place but we were lucky and they let us in. I actually held a Hoopoe and a Melodius Warbler whilst I was there. Magic moment. Out on the reserve can be found Red necked Nightjar and Quail. They both need a lot of searching through the vegitation but I managed to find both species. Also there can be found Lesser short toed Lark, Kentish Plover, Stone Curlew, Little Egret, Waxbills plus many other birds. Another site well worth visiting.
A longer drive would be along the road from Castro Marim to Mertola and beyond. You will pass a large barragem on your left (reservoir) I think it's the Barragem de Beliche. Check around the road here plus any part of the road that passes over rivers as anything could turn up.
Look out for the Ribera (river) de Foupana. Here I had large numbers of Bee Eaters plus Red rumped Swallows, Turtle Dove, Great spotted Woodpecker, Kingfisher plus a few Azure winged Magpie.
Quite a bit further on look out for the Ribera de Vascaro which is well up and just outside the Algarve region. I had Crag Martin and Black Wheatear here. Also (if it is still there) was a huge sign with Alentejo on it (there was more writing on that that but that name stands out. Around this area were a large number of Golden Oriole. At Mertola itself (about 45 miles north of Castro Marim) are Rock Buntings, Blue Rock thrushes and Crag Martin.
Now I found a road (north of Mertola) going to an area known as the Pulo de lobo Gorge It goes through a village named Amendoeira. I didn't have much success at the gorge itself (with the exception of a singing Woodlark and large numbers of Crag Martin). This was a shame because it is supposedly a stronghold of large numbers of raptors and Black storks. On the way birds seen along this route were, Stonechat, Woodchat and Great grey Shrike, Corn Bunting, Hoopoe, Kestrel, Fan tailed warbler, Linnet, Goldfinch, Pigeon, Turtle Dove, Blackbird and more Golden Orioles heard, but not seen.
Now for the special birds. Just before the first village, name not known, I saw the first of many Stork nests. Whilst watching them 2 birds flew out of a small wood, I managed to get my scope on one of them and one of my target birds of the holiday was found. 2 Great spotted Cuckoo were flying across the field in front of me then a song was heard behind me and I turned in time to see a Black eared Wheatear land on a wire. In the same field but dropping down onto the ground was another cracker. It was a Rufous bush chat then a Calandra Lark dropped into the field at my side followed by a Short toed Eagle flying overhead. A Red legged Partridge shot across the road in front of me and about a 100 yards down the road 2 Short toed larks dropped onto a wire. That place was probably one of the most productive places in such a short time. It took all of 15 minutes to see that lot. Just passed Amendoeira I found the only Bonnelli's Eagle of the holiday.
You should also check out Monchique, the highest area of the Agarve. I actually drove over to the other side and around a village calle Foia we had Sparrowhawk, Common Buzzard, Bonnelli's, Melodius, Fan tailed & Olivaceous Warbler, Jay, Corn Bunting, Swallow, Red rumped Swallow & Stonechat.
If you can you should also try and go to the far western point (Cabo de sao Vicente) which is the furthest western point of Europe. This can be an excellent sea watching area (supposedly superb for the autumn migration) plus around the rocks Black Redstart, Choughs, Blue Rock Thrush, plus a bit inland could be found Little Bustard, allthough i couldn't locate them. Ospreys supposedly breed not far north of here as well.
I could go on and on. For instance I found a superb site near to the Salgados golf course inbetween Albufeira and Armacao de Pera that had fair numbers of Red necked Nightjar, Stone Curlew, Whimbrel, Purple Heron, Little Owls, Fan tailed warblers, Crested Larks, Black winged Stilts plus the only Orphean Warblers I had on this holiday. It is also a good sea watching area here as well.
There are so many sites I have left out but if this little selection hasn't whetted your appetite then nothing will.
Have a good un!!