If the ATM is provided by a bank you get the interbank rate or the visa rate - plus whatever charges your bank decides to impose.

If it isn't (eg any at T5 LHR) then you'll get whatever rate they want to give you plus your bank charges PLUS an additional charge for the owner of the ATM.

ie exactly the same rules for any ATM in the UK.

Indeed, so do watch out for ATMs that that charge what can be a hefty fee, on top of all the other fees you get from your own bank. These are becoming sadly commonplace in the UK, particularly in pubs and cheaper minimarkets, charging as much as £3 per transaction.

On the plus side, they are obliged to inform of the charge before you withdraw your cash. Just make sure you don't blindly click through the various stages (particularly if it's not an ATM attached to a bank). It's very easy to do that.

I noticed at Victoria Station a few weeks ago, there were signs that said all ATMs there did not charge any fees. Of course your bank may do so.

Are all U.S. ATM cards valid overseas? i.e. Wells Fargo for example.

If you can use your ATM card at any ATM in the US (i.e. its part of one of the networks) you will almost certainly be able to use it in the UK (and pretty much any major country). The fees that you'll be hit with (a per transaction fee and a % fee, though the % fee will be obscured in the conversion rate) will vary by bank. Some banks of part of a network that doesn't charge each other fees. The only one of these (though there may be others) that I know is Bank of America, Barclays, Deutsche Bank, and others, so if you have a BoA ATM card and withdraw cash from a Barclays ATM, some or all of the fees will be waived.

I used my Wachovia ATM card numerous times in the UK after their merger with Wells Fargo.

Something very similar at BHX on £-€ last week, I got mine from the Sparkasse at DUS.

Just have to chirp in with all the comments about forex. The best place I've found for forex is called (yes, I know, sounds dodgy) BestForeignExchange.com. Order on their website - http://www.bestforeignexchange.com/fast_track_new.php - and go to the shopfront to pick it up the same day. They are actually 'Thomas Global Exchange' but operate BestForeignExchange.com with slightly better margins.

I've been to both their Victoria and Charing Cross (Strand, right beside the Vaudervilla Cinema) and they are no problems as long as you take a screenshot/printscreen of the rate before you arrive (sometimes they can't find the order = too lazy to look it up) and explicitly mention you want the BestForeignException rate. I've yet to find a place with better rates. Used them 7-8 times and will keep using them.

Thomas Exchange do all of our corporate forex and are very reliable. I'd be very comfortable about using anything backed by them.

Agree about it being one of the best place to exchange in London and you will be a little better off by using the 'fast track' collection over just asking over the counter.

Rates are usually in the top 3 in terms of competitiveness and I find them reliable (in any event, if you are exchanging cash on the spot, risks are limited). Some other forex places can occasionally beat them by a whisker but it is usually the same 2 or 3 suspects that get you best rates. http://travelmoney.moneysavingexpert.com/ will give you up-to-date rates of all of them but, as it designed for Britons going abroad, it is rates for buying currencies with £ rather than the other way around (you can, however, use the links to each bureau de change to find the rate in the other direction).

And given what happened with Crown Currency if I was ordering online it would ONLY be via credit card and with a company that was FSA Regulated. As people are finding out being FSA Registered is not worth the paper it is printed on.

ATMs outside LHR have better rates, less fees. I use my card to buy tube ticket, then grab cash in town. My preferred cards are ones with no fees, while my Compass debit will refund me fees I pay to other banks when I bring in my receipts.
Watch out for fees and exchange rates, but cards for purchases and cash is the way to go. Make sure you check with your bank about using overseas. The only problems I have heard of were people whose bank didn't understand they were traveling.

This is the great thing about Thomas Global / BestForeignExchange.com - they don't take creditcard details online. You don't pay anything (using their fast track service) until you pick up in store at which point you can use cash or plastic.

Anyone who delays delivery of your purchase to give you a better rate is just asking for problems. I've never been a fan of lay-bys.

In T1, T3 & T4 most of the ATMs are suppied by banks, so there are no fees for using them and you get either the interbank or Visa rate for withdrawals. What your bank sticks on top in fees and charges is another question

trip update
 

happy to report I had no trouble using my Visa without a chip/pin at every store I tried. I also was able to withdraw cash using said Visa at an ATM at Heathrow for no fee and was able to change cash later at a very good rate at Gloucester Road tube station.

I am grateful for the pointers and feedback. I did call my credit union and Citibank in advance to tell them I was travelling. I ended up not using my Citi card since they wanted to charge a 3% transaction fee for international purchase and my credit union only charges 0.8%. Significant difference and so glad I checked in advance, I spent quite a bit shopping on this trip.

That's true!

Some places might not charge the additional fee, but your bank sure will.
Watch out!
Better one than two though.