No, bird and bat poop is not explosive. You can't exactly take out your favorite black powder firearm and load it up with droppings scraped from old George in the park and expect it to fire. But it was used at one time to provide one of the ingredients of gunpowder. Dovecotes were even guarded at one time to prevent thieves from stealing the valuable commodity, and wars were fought over islands that were covered feet deep in seabird guano.
No, you can't make gunpowder out of Pigeon droppings. You can extract Saltpetre, or Potassium Nitrate. Many kinds of manure are high in nitrates, and Pigeon manure is one of them.
Through a rather tedious process of composting and leaching, the Potassium Nitrate is extracted from the manure. The process requires a lot of urine also, and probably a few other elements that many people would rather not handle directly. If you are really that curious, this entry in Wikipedia explains how to extract Potassium Nitrate from Guano.
You'll also need some sulphur. If you are determined enough, you can find natural deposits of sulphur, or you can drop in on your local Mad Scientist's Supply shop and pick some up there. Wikipedia also has an article on Sulphur and lists natural sources.
You can make your own charcoal, which is the final ingredient to making homemade gunpowder, should you ever find yourself in a situation where you absolutely need homemade gunpowder!
Now, don't go do something stupid just because you happened to read about making gunpowder using Pigeon droppings online. We don't want to hear about you getting thrown in lockup on suspicion of public intoxication because you were harvesting Pigeon droppings from the local park!
I am also obligated to post a disclaimer. I am not a scientist. I am not a pyromaniac. I am not any kind of firearms expert. All I know is that gunpowder can, under some circumstances, which the above instructions might lead you to discover, go "Boom". If it does, don't blame me. You are hereby duly warned. If you are a terrorist, wacko survivalist (as opposed to a normal survivalist), or mass murderer wannabe, please go somewhere else to get your instructions, we aren't going to help you!
This article was written for historical information purposes only. It is not intended to teach you how to manufacture gunpowder in your basement. It was really written because it was kind of a cool topic I ran across while completing some Pigeon research, and it always made my husband laugh, and since there were not many articles out there on the subject, in spite of a pretty significant number of people asking about it, I figured it would be a pretty easy topic to write about for total search engine domination of the Pigeon Poo to Gunpowder rankings.
There, you have the entire unsavory truth!