Theory of Avian Evolution 
             

                Comparative anatomists during the 16th through 19th centuries noticed
                that birds were very similar to traditional reptiles.  In 1860, shortly after
                the publication of Charles Darwin's The Origin of Species by Means of
                Natural Selection, a quarry worker in Germany spotted an unusual fossil
                in the limestone of the Solnhofer Formation (late Jurassic period).  This 
                fossil turned out to be the famous 'London specimen' of Archaeopteryx. 
                It is an example of a "traditional form" between the two vertebrate groups
                of reptiles and birds.  Archaeopteryx, generally accepted as being the oldest
                known bird, is an important link between birds and other coelurosaurs that 
                has helped to illuminate the evolutionary history (phylogeny) of the group. 
                It is a common misconception that it is the ancestor of all living birds.  Recent
                expeditions in China, Mongolia, Madagascar, Argentina, and elsewhere may
                uncover dinosaurs that usurp the "urvogel" status of Archaeopteryx.  An 
                example of this would be the specimen of Protoavis.  

                Many scientists, including Thomas Henry Huxley (a supporter of Darwin), 
                saw similarities between birds and the theropod dinosaurs (especially the
                coelurosaurs).  Others since Huxley have also hinted at the striking 
                resemblances.  However, birds were still not well accepted as dinosaur
                descendants - such hypotheses as A. Walker's "crocodylomorph" ancestor
                and G. Heilman's "thecodont" ancestor held sway for most of the 19th and
                20th century, or else birds were simply dismissed as originating from some
                unknown reptile that didn't matter anyway.  Dr. J.H. Ostom's 1969 description
                of Deinonychus antirrhopus and its similarities to Archaeopteryx was the
                major step.  His work since the 1970's has provided the impetus for a
                paradigm shift in paleontologists visions of the origin of birds and the 
                evolution of flight. In the mid-1980's, Dr. Gauthier's cladistic work provided
                the best analytical systematic support for the theory that birds are the 
                descendants of dinosaurs.  Several independent analyses by other scientists 
                have repeatedly upheld Gauthier's results.  Today the controversial issue
                is specifically which dinosaurs are the closest relatives of birds.  

                The first birds shared the following major skeletal characteristics 
             with many coelurosaurian dinosaurs:   

                    Publis shifted from an anterior to a more posterior orientation.
                    Elongated arms and forelimbs and clawed manus.
                    Large orbits.
                    Flexible wrist with a semi-lunate carpal (wrist bone).
                    Hollow, thin-walled bones.
                    Three fingered opposable grasping manus, 4-toed foot
                    Reduced, posterior stiffened tail.
                    Elongated metatarsals.
                    "S" shaped curved neck.
                    Erect, digitgrade stance with feet positioned directly below the body.
                    Similar eggshell structure.
                    Teeth with a constriction between the root and the crown.
                    Functional basis for wing power stroke present in arms and pectoral
                          girdle (during motion, the arms were swung down and forward, then
                          up and backwards, describing a "figure-eight" when viewed laterally).
                    Expanded pneumatic sinuses in the skull.
                    Five or more vertebrae incorporated into the sacrum.
                    Straplike scapula.
                    Clavicles fused to form a furcula.
                    Hingelike ankle joint, with movement mostly restricted to the fore-aft
                          plane.
                    Secondary bony palate (nostrils open posteriorly in throat).

                Excerpt from Are Birds Really Dinosaurs? - Berkeley