The birthday implementation in beta1 was incomplete and had performance issues. The birthday feature is hopefully coming back in 1.2, at worst 1.3. The code is ready, and now works for all your contacts, except facebook (due to legal restrictions).

Note that since contactsd is open source, you could also checkout the code (see link [1]) in my original code, the birthday plugin is already packaged separately. So it'd just be a matter of installing the package on a 1.0 device (untested, might kill kittens).