In a 1960 article Pigeons in a Pelican, B. F. Skinner gave an account of his experiments, the problems he encountered and how they were overcome. The details are too lengthy to cite in full here, but his final demonstration (1944) before the project was rejected shows that - on an experimental level in a laboratory - the system showed promise. A later experiment (after the project was revived in 1948) had a 55.3% success rate with "simulated missile-flight speeds of about 400 miles per hour".
Writing on the 1944 demonstration to "a committee of the country's top scientists", Skinner observed that:
The basic difficulty, of course, lay in convincing a dozen
distinguished physical scientists that the behavior of a pigeon could
be adequately controlled. We had hoped to score on this point by
bringing with us a demonstration. A small black box had a round
translucent window in one end. A slide projector placed some distance
away threw on the window an image of the New Jersey target. In the
box, of course, was a pigeon — which, incidentally, had at that time
been harnessed for 35 hours. Our intention was to let each member of
the committee observe the response to the target by looking down a
small tube;
However, the committee of scientists were pressed for time so
we were asked to take the top off the box. The translucent screen was
flooded with so much light that the target was barely visible, and the
peering scientists offered conditions much more unfamiliar and
threatening than those likely to be encountered in a missile. In spite
of this the pigeon behaved perfectly, pecking steadily and
energetically at the image of the target as it moved about on the
plate. One scientist with an experimental turn of mind intercepted the
beam from the projector. The pigeon stopped instantly. When the image
again appeared, pecking began within a fraction of a second and
continued at a steady rate.
(my emphasis)
Skinner had also
trained pigeons to follow a variety of land and sea targets, to
neglect large patches intended to represent clouds or flak, to
concentrate on one target while another was in view, and so on. We
found that a pigeon could hold the missile on a particular street
intersection in an aerial map of a city. The map which came most
easily to hand was of a city which, in the interests of international
relations, need not be identified. Through appropriate schedules of
reinforcement it was possible to maintain longer uninterrupted runs
than could conceivably be required by a missile.
Source: manifestajournal.org. The image is copyright bfskinner.org (more images at this link). The image shows an "arrangement for studying pursuit movements."
Despite this successful demonstration, why was it not pursued? Skinner noted that:
It was a perfect performance, but it had just the wrong effect. One
can talk about phase lag in pursuit behavior and discuss mathematical
predictions of hunting without reflecting too closely upon what is
inside the black box. But the spectacle of a living pigeon carrying
out its assignment, no matter how beautifully, simply reminded the
committee of how utterly fantastic our proposal was. I will not say
that the meeting was marked by unrestrained merriment, for the
merriment was restrained. But it was there, and it was obvious that
our case was lost.
The official word on the rejection was:
"Further prosecution of this project would seriously delay others
which in the minds of the Division would have more immediate promise
of combat application."
Doubts also existed because of the perceived slow progress and budget overruns; the project was still at the laboratory stage. Prior to the above demonstration, chief technical officer of Division 5 of the Office of Scientific Research and Development (OSRD), Hugh Spencer had stated that
the results were "not of sufficient promise to justify my asking him
to go any farther or giving him any expectation of further support
from NDRC."
The above demonstration was one of several, and used a single pigeon. In fact, Skinner was by this time using three birds to improve reliability (the idea being that if one bird 'malfunctioned', it would be overruled by the other two). This involved a simulator for the Pelican (the missile which the US government wanted guided). It was
a wing steered glider, still under development and not yet
successfully steered by any homing device.
Three-pigeon guidance system, demonstration model Source: uca.edu
The simulator for the Pelican missile,
tilted and turned from
side to side. When the three-bird nose was attached to it, the pigeons
could be put in full control—the "loop could be closed"—and the
adequacy of the signal tested under pursuit conditions. Targets were
moved back and forth across the far wall of a room at prescribed
speeds and in given patterns of oscillation, and the tracking response
of the whole unit was studied quantitatively.
"Simulator for testing the adequacy of the pigeon signal". Source: B. F. Skinner, 'Cumulative record; a selection of papers' (1972)
There are also a few videos which contain clips of, among other things, the pigeons 'in action'. See, for example, rocketryforum's Project Pigeon (later ORCON).
After WWII, in 1948, the pigeon project was revived:
In simulated rocket tests, the pigeons produced "surprisingly good
results." The researchers were convinced that a pigeon could
successfully guide a speeding missile under optimum conditions,
compensating for his own and the missile's errors...
...The control circuits were such that if the pigeon stopped tracking,
the target image would drift rapidly away from the center of the
screen. This forced the pigeon to correct not only his own pecking
errors, but those introduced by the yawing of the missile. It turned
out that 55.3 per cent of the runs made were successful...
"Stills from Project Orcon video." Source: elearningindustry.com.
However, in 1953 the project was again abandoned as, by then, "the reliability of electronic guidance systems was proven."