Does My Eclipse come configured with Hibernate Tools and BIRT?

BIRT, not yet, but something will be announced soon. Hibernate functionality, yes a lot of it, here: http://www.myeclipseide.com/htmlpages-func-display-pid-18.html

If you use myeclipse is it discourged to install other outside plugins like BIRT or tools from Instantiations like RCP Developer?

TMehrens,
No, we definately encourage you to add other plugins as you need them. But please keep in mind that due to the size of the Eclipse platform and some of the products based on it, you *can* run into plugin dependency conflicts from time to time. So after installing a plugin make sure functionality is still behaving itself before installing the next plugin.