Bards, as they are presented in the 3,5 PHB are not underpowered compared to other classes. That said, they could certainly use some tweaking. Fluff-wise, bards make a lot of sense. As before mentioned, bards have existed in for ages, both in the real world and in the D&D world. However, I think a lot of people seem to get stuck on the "song" part.
I'd like to direct you to your favorite action movie of choice. Now focus on any good fight scene with more than one character involved on the "good" side. Alright, now tell me, do the characters not indulge in idle conversational banter which may or may not be humorous but certainly keeps up the morale?
There you have it, one of them is a "bard" and is using perform:oratory to boost the morale in the party. Is that not cool? I think it's awesome.
Bards are the face, the ambassador, the encourager and the morale officer of any party. They can fill in any role and do it well. They might not have a specific function except boosting when it comes to fights, but they're not supposed to have one.
To make the bard more on par with the other alpha release classes, I'd suggest the following:
At first level, the bard may choose one weapon which he is proficient with in addition to his usual proficiencies. -this would reflect his traveling nature and his ability to absorb cultures and styles, while also adding another bit of flavor and combat strength.
Instead of a specific progression of his bardic music ability, allow the bard to choose which new music abilities to learn. They could choose these from a list, similar to the way a rogue chooses her rogue talents. This would make the bard more adaptable while still remaining true to his nature.
Remember that the Bard is more like a divine caster rather than a arcane caster. He gains his spell-casting powers not from arcane runes or magical blood, but from music itself. Adding sonic spells to his list would definetly be handy, and perhaps doing it in a way which incorporates his musical abilities would be great.
In my opinion, the limited spell list and spell per day function works very well for the bard. Perhaps giving the bard more known spells wouldn't be half bad, as long as the spells he can choose from are still focused on the bard class or perhaps very compatible with it.
Fix the broken level progression. (Which I am sure is already the intent) Bards have plenty of broken levels where they receive nothing but some saves and a spell or two. Giving them new and interesting things at each level would revitalize the class and make it worth playing even for roll players as opposed to role players.
Maintain the team-based spirit of the bard. The bard has great survivability on his own as is, and his diversity is part of what makes him so awesome in a group.
So, to conclude, I think that changing the bard as drastically as the OP and his supporters have suggested would defeat the purpose of the bard entirely. The "song" part of the bard need not literally be him singing but could be whatever you interpret it as, be it playful banter, chanting, playing the piano or singing scales or even doing some interpretive dance. It already is like this (Except for the dance part), so what people seem to want is for it to be put in print, detailing specifically what is allowed and what is not advised.
It seems that a lot of the resentment towards bards comes from peoples' own lack of imagination. The bard can be a lot of things, but crappy or lame are not on the list of things I'd call them.
