So the PMD660 records wav files in 16 bit, up to 48KHz, which is slightly higher than audio CD quality (16 bit 44.1KHz). With an appropriate mic, I can't see why you would not be able to get some good quality recordings.
Obviously with this device you won't have the advantage to 32bit float, which is becoming popular and means you don't have to really worry about gain control or clipping.
A lot of people record a 24bit, but generally the noise floor of 16 bit will be exceeded by environmental noise, so I think people tend to record at higher rates because memory is cheap and they can - rather than there being a marked quality improvement. Same goes for higher sampling rates.
My main problems with recordings are positioning (getting the mic close enough to the bird), wind, traffic and other environmental noise. I think these are generally more important for a reasonable quality recording, than the sound quality or specification of the recorder.
Upside of the PMD660 is that it has two XLR connections with Phantom Power, so can be used with prosumer/professional mics.
Downsides - short battery life (4 hours on 4AA), use of less popular CF cards (also not sure what the max size the machine will take, so recording length could be limited), and spec suggests noisy inbuilt mic, if you want to use it without an external one.
