Am I expecting too much from my lens??

[aussie girl]

Hi everyone. I have a 70-300mm kit lens that came with my Olympus E520 camera. On the weekend we went out for a drive and saw a bird that we thought was unusual, so we turned around to try to get a few snaps.
The bird had flown back into its nest and I could just see it's head poking out of the nest. I took a few shots but they all seemed to be out of focus. In some, the tree branches in front of the bird where more in focus than the bird, so I figured that, due to the camera being on AUTO, the lens had tuned into the branches first and not the bird, so I understand that part.
I then saw some parrots on the ground so zoomed in on them. They were about 50 feet away, but all of the photos seem out of focus, the foreground, the birds and the background. The settings on these photos were AUTO 180 F5.6 0.0 300mm ISO 100.
I changed position a little and the settings changed to AUTO 80 F5.6 0.0 300mm ISO 100. These are a little brighter due to the shutter speed being a bit longer, right????

I then tried to take a photo of a bird in a tree which was about 60 ft away from me. I took one photo with the camera in P mode. settings were P 250 F5.0 0.0 70mm ISO100. The bird and the branches of the tree are not in focus. Next I tried to zoom in as far as the lens would allow and took another shot. Settings were P 100 F5.6 0.0 300mm ISO 100. Again, the bird and the tree are out of focus Should I have used a quicker shutter speed?? more ISO???
Frustrated with this, I then focused on a tree trunk right in front of me, at least I knew the subject would not move!!!! The tree was about 20 feet away.
I took one photo on these settings P 125 F5.6 0.0 300mm ISO 100 and the other on P 60 F5.6 0.0 300mm ISO 100. When I looked at the photo and magnified it on the camera, the markings on the bark of the tree were not clearly focused in either photo. What the heck am I doing???

How far away from a subject can I be and still get a clear, focused picture with a 70-300mm lens????. I know I have a LOT to learn about this camera, but even on AUTO I seem to be getting hit and miss pictures. I have been reading through the lessons in the beginner section to try and get a grasp on Aperture, Shutter speed and ISO, but I am wondering if maybe I am expecting this lens to take pictures that it just cant take??? I wouldn't expect to have to use a tripod if bird watching, because it would make it nigh on impossible to set it up and get it set right before the bird flew off into the wild blue yonder. I need to be able to get photos hand held, but so far I seem to be failing miserably. Hubby is continually saying I have a crap camera, but I am sure that the camera is fine, I just haven't worked out how to use it!!!

HELP!!!! (before I throw it on the ground and throw a massive tanty!!!)