"sitting in the catbird seat" is "sitting pretty" or "being on top of
the world" or even "having the upper hand". Whoever is sitting in
the catbird seat is having an easy life full of success, has no
problems, and is in an advantageous position with regard to a given
situation.
A catbird is a kind of mockingbird very good at imitating the sound of
other animals, particularly the sounds of cats. Catbirds and
their cousins the mockingbirds like to find the highest spot in the
neighborhood and survey the area from there while they practice their
calls. (The last few summers I've had personal experience with
this. Our mockingbirds in California will imitate anything,
including car alarms, and one of them has been perching on my
neighbor's TV antenna and singing his little heart out all day and
all night long for months! He doesn't do car alarms very often, but he's very good at the (American) robin's call.)
CJ