Painting a birdhouse is a fun and little project that's as simple as it seems. However, because birdhouses are meant to house birds, some care should be taken in selecting and applying an appropriate type of paint.
One of the first considerations with any type of painting project is its location. Because a birdhouse belongs outside and because your birdhouse is likely to be made of wood, you want to seal it with a good primer before applying any paint at all. This will protect it from the effects of the weather and make each coat of paint much more vibrant.
Choose a good exterior paint to apply to your birdhouse. However, it is important that you prime and paint only the exterior of the birdhouse. This prevents worry about whether or not the paint is toxic to the birds you hope will live in the birdhouse.
Leave the interior natural. There is no reason or need to paint it. The birds will thank you for giving them a "wild" interior.
As far as color goes, choose colors that compliment your house and yard. At the same time, it is prudent to be conservative when choosing colors. Afterall, you want to attract birds rather than frighten them away.