Birds use birdbaths for two purposes: drinking and bathing. Birds bathe, either in a bird bath or a shallow puddle, to remove parasites and clean their feathers. Dirty feathers don't function very well, leaving birds unprotected from the elements and making it harder for them to fly. After splashing around in the bath, birds preen their feathers to add a layer of protective oil that is secreted from a gland at the base of their tails.
The traditional saucer-on-a-pedestal birdbaths might be pretty, but they don't work very well. They're often too deep, since a birdbath should be only 2 inches deep at the center and 1/2 to 1 inch deep on the sides. The bottoms are either smooth, which are too slippery for birds, or rough concrete that's difficult to clean. They often crack in the winter and are much higher than birds prefer.
The best birdbath is is one that mimics what birds would use naturally: a puddle. Unless cats are a problem, create a birdbath on the ground. Not only will this attract more birds, but it can serve as a source of water for small reptiles and mammals. The bath should be saucer-shaped, with sloping sides and a rough bottom. Adding sand and pebbles to the bottom helps birds keep their footing. Add a few branches and rocks in the birdbath for birds to stand on without getting wet. Place the birdbath in the shade to keep the water cool, but keep it at least 10 feet away from thick brush where predators may be hiding.
Once you've created a more natural birdbath, add a fountain and a heater to make it work better. Birds are naturally attracted to the sound of moving water, which is one purpose of the fountain. The fountain also keeps your birdbath from becoming a mosquito breeding ground. Mosquitoes need still water to lay their eggs. A heater keeps the water from freezing in the winter. Finding fresh water can be hard for birds when everything is frozen over, and any available water source will become a magnet for birds.