I have actually played two games with this title so I'll stick them both in the same WU... hold on tight.
Warbirds was a 3D World War 1 flight simulator for the Atari Lynx handheld. Full taking advantage of the Lynx's power, this game was years ahead of its time.
There have been numerous other attempts at flight simulators on handheld systems - Turn and Burn by Absolute on Game Boy is probably the best - but Warbirds was a PROPER sim.
The action took place in a proper, full-colour, filled polygonal 3D world. You could look in all directions around the cockpit of your biplane, and shoot down loads of enemy aircraft. The graphics were wonderfully smooth and colour, the controls were perfect, and the game was simply incredible. Add a nice digitised victory picture of Canadian Ace Billy Bishop and you had an excellent game.
Warbirds was ALSO a multiplayer online World War 2 flight sim from a company called ICI.
The battles took place over a huge map, either a very basic rendition of Europe and North Africa, or more often a generic chain of South Pacfic styled islands. There were four 'countries' - red, orange, green and purple, each started controlling one main airbase, three smaller airbases, and one naval task force including an aircraft carrier.
The large airbase sported six AA guns, three large, long, wide runways and was capable of launching any of the aircraft, from P-39s to B-17s. The smaller airbases and carrier only supplied the smaller fighters, dive bombers and torpedo bombers. This was intended realism, but in numerous occassions I landed bombers like the B-25 and B-17 at the smaller bases... I could even get them up again from the tiny runway! Must have been a sight to see from the tower (where you'd 'spawn' upon switching to an airbase to select a craft), a huge bomber struggling into the air...
The objective of the game was to capture all of any one opponent's airbases. An early change to the rules meant that even if a country retained an aircraft carrier, they would still lose if all their fields were captured. To capture an airbase, all the AA guns, hangars and control tower had to be destroyed, and then one of your team's planes had to land at the base. The various facilities would repair in a few minutes, meaning the invaders had to then prevent any other team landing immediately after and snatching the base away. As for the carrier group, it would sail around the islands... often providing a staging point just minutes off the coast from an enemy base! When one of the ships was destroyed, a new one would spawn at that team's shipyard, and the TF would change course for the shipyard to collect the replacement. As far as I remember, it wasn't possible to capture an enemy carrier.
When all of a team's bases were captured, the capturing team was declared the victor in the war, and all bases reset to their default owners.
The game originally ran under DOS, with basic 3D graphics. A Windows 95 version was later released, and the program was constantly updated, with an eventual Direct3D version sporting retail-quality graphics and terrain.
Flight models in Warbirds were incredibly realistic. I once put the B-17 into a spin, and diving to recover overstressed the wings. Climbing took ages, and only a basic autopilot (Hold heading, hold speed, hold angle) was available. The crash model was also incredibly detailed, with nerve-wracking belly landings where you'd still have to struggle to keep the plane from flipping over if you wanted to avoid having another crash on your record.
Of particular note were the weapon controls. Gun convergence distances could be set on the fighters. The bombers had variable bomb loads, and an incredibly realistic Norden bombsight which allowed pinpoint accuracy provided it was aligned properly (which required several minutes of straight, level flight). Later versions allowed multiple crewmembers within a single aircraft.
For a game in the age before broadband, Warbirds was mostly free from lag. There was still the slight problem of your quarry 'warping' slightly, but on the whole combat was enjoyable. As an added touch of realism, text communications required tuning one's inflight radios to certain frequencies... there were four radios, allowing one to have, for example, Radio 1 as the global frequency, 2 as your country's frequency, 3 as your squadron's frequency, and 4 as your flight or in-plane frequency.
Typically of online games, people banded together in groups. An elaborate stats system tracked everyone's standings. There were plenty of squadrons, but only a few (most often the bomber squadrons) ever played serious with a proper sense of teamwork.
I don't know what ever became of ICI or their space-based sim. Warbirds was not a cheap game ($3/hour!) and, a mere teenager at the time, it was out of my price range.