I know next to nothing about Americas post-civil war history, nor do I know anything about Americas race relations around the time the film was released. I'm quite shocked having seen it so here's a few questions.
If these question should be posted elsewhere please let me know and i'll post them elsewhere.
To preface what I am about to write: congrats! You picked one of the single most difficult films, ever. Good choice! For those who aren't sure why this film is so difficult, basically, it portrays the KKK as postbellum heros.
I would also like to add that for anyone curious, the film is [readily available] (http://www.youtube.com/watch?v=iEznh2JZvrI).
That being said, there are two things to keep in mind when considering BoaN. One, is that the film is very much a product of its time (this is not to be apologist; the director/producer, D. W. Griffith, himself stated that the film was not propaganda), and two, technically speaking, Birth of a Nation is arguably the most important American film that will ever be made.
Now, to answer your questions before I segue into what makes BoaN so special.
D.W. Griffith self-financed the film. This was for a few reasons. One was that it was an insanely expensive movie (for the time. On the previous link, you'll see that it cost just over 100k. This was at a time when other major films were costing just over 17k. The other reason was that he knew, from the get-go, that he wanted full artistic license. This, in 1915, was hard to get when working with a major studio: we are talking about the era of the beginnings of the infamous studio system, after all.
Reactions to the film were as polarized as one may expect. Check out the fourth through seventh paragraphs of this article. Many African-American individuals and organizations such as the NAACP fought tooth-and-nail to have the film censored (it eventually was, later). The film was massively controversial for decades, and largely still is. The white reaction was curious. Many Northern whites, including the president at the time, Woodrow Wilson, were pleased by it. President Wilson famously said, "it is like writing history with lightening, and my only regret is that it is so terribly true.". However, it was also entirely banned in eight major northern states, including Massachusetts, Illinois, and Pennsylvania. As you can see also in that link, the southern reaction was more extreme: the KKK used it, and still uses it as an extremely successful recruitment tool.
The extras question is a good one: yet another reason the film is so controversial, is the generous application of blackface. This, coupled with an ingenious filming technique, still in use today to multiply crowds, actually allowed there to be fewer extras than it looked. Finally, extras of many ethnicities were readily available around LA at that time; Birth of a Nation payed extremely well.
4)Birth of a Nation is revisionist to the absurd, there is no debating that. Many "facts" in the second half, which leads to the conclusion that the KKK, not the Northern Reconstructionists, are the good guys, are pretty visibly embellished for effect (the climax in particular, is jarringly racist). However, perhaps a Civil War historian could chime in here? I do assume there was intense racial violence immediately after the Civil War, but to my knowledge the KKK was pretty terroristic from the get-go. I don't presume to know much about this topic though.
4). As stated earlier, D.W. Griffith allegedly held no agenda in making it. However, it is also worth mentioning that he was raised in rural Kentucky, and his dad was a colonel in the CSA.
Now, briefly, why is this film so important? Look about a quarter down the page on this article. Those bullet points are just a few of why the film was named one of the most important of all time, has a place in the Library of Congress, etc. Basically, until this movie was made, films were just a recording of a stage play. See this image? In 1915, that would be at the front of an outdoor stage, and just run as people performed on said stage.
Now think about any film you've seen: the camera, switching between people? Close-ups? Landscape shots? Even simple things as having night and day actually differentiated? Birth of a Nation invented ALL of it. Not only was that movie dramatically ahead of its time, but the cinematography was so genius, the optical illusions invented are what allow us epics such as the battle scenes or drastic size differences of The Lord of the Rings Trilogy. That video shows how they did it: believe it or not, Birth of a Nation invented forced perspective, among countless other things.
This is not to say the film is not breathtakingly racist: it is. It really is. However, it is also breathtakingly innovative, and must be considered as such. This is a fantastic article that outlines both the films' problems, and impact.
Here's a minor point - I read on wikipedia that the Clan practice of burning crosses originates from this film, and that the first Clan (the one founded at Stone Mountain and active during reconstruction) didn't practice it. Is this true? I also heard that the burning cross was intended as a revival of a practice of Scottish lords burning crosses on hillsides to summon their warriors, so obviously there are alternative theories.
