Yes, most places do take credit cards, but I would have at least some cash while you're there. However, wait and get it from an ATM. You'll get a better exchange rate even if you have to pay fees (if your bank does charge fees, though, plan ahead so you don't have to withdraw cash very often). Plus it's not worth the stress of worrying how many US$ to have on hand, where to exchange them... all that. Really, it's easy (ATMs all over the place) and in all likelihood you'll have no issues.

I notify my bank on line that I will be traveling. It is easier and quicker than waiting on hold for a representative. Plus, there is written confirmation (via a print-out), although I have never actually needed it.

"<i>Does it make more sense to get cash here at my own bank's ATM and exchange it when we get there? </i>"

Absolutely not. You will pay a fortune exchanging all those $$ for ££ in London -- plus you have the security issue of carrying all that cash.

Even w/ the small fees, it is much cheaper to get £ out of ATMs in England than to convert $ to £.

Couple of other points

1) European ATMs don't have letters on them - so if you remember your PIN as a word you are going to have problems.
2) ATM withdrawals will be from your check account, so ensure that your spending money is in there.
3) Don't expect to use your CC for every transaction - many small businesses don't accept CCs at all and those that do generally have a minimum spend