My first post here, and I agree with the poster who says that things have changed hugely since the incident referred to at the beginning of this thread.
I am a London based photographer, who travels through the City daily on my way from home to studio, photographing whatever catches my eye. I have had no hassle in the last couple of years, but was subject to several polite and not-so-polite questionings by police before 2010.
After that incident, and several other similar ones, the Association of Chief Police Officers have told the police that they have no right to stop people taking photos in public.http://www.pressgazette.co.uk/story.asp?storycode=45956
and they have re-issued this advice to police forces several times.
This organisation of which I am a memberhttp://photographernotaterrorist.org/
has been campaigning for police (and security guard) recognition of photographers' rights, and has been pretty successful in doing so. There are some interesting videos on the site where photographers have gone out shooting, specifically to test the change in police awareness. They've found that, by and large, the police recognise photographers' rights to take photos in public, though security guards are less aware. When the private security guards have summoned the police, the police have backed the photographer.
One thing that one must recognise is that there is a difference between "public" and "private" land. For example, Trafalgar Square is not actually a "public" space, and the "heritage wardens" who patrol the space may take exception to people using it for "professional" shoots without prior arrangement and a licence.
But in general you have nothing to fear from taking photos of anything and anyone with any equipment you choose in a public place in the UK. NB this may not apply around the Olympic sites! We're just about to find out what all that's about....