Lots of info about IRIS in the BA Forum. More at
http://www.ukba.homeoffice.gov.uk/ma...chnology/iris/
It's not just at LHR T2, it's at all five LHR terminals and also LGW North and South, MAN T1 and T2 and BHX T1.
The experience you report is not typical. I've used it dozens of times and been rejected once. Sometimes non-registered pax try and fail, and that's not helpful to those waiting.
It is free of charge and available to all travellers with no immigration status restrictions, unlike Clear in the US and some other programmes. You need to register when departing from one of the listed airports. In the future, it may be replaced by face recognition sytems, but only when CHIP-enabled passports become more widely available.
As somebody who used to have an INSPASS card which is no longer available, I wish the US had something similar.