It's not always totally clear cut. I'd suggest starting at the link below, and then by phoning your local British Consulate with any further questions.

http://www.ind.homeoffice.gov.uk/ind/en/...tizenship.html?

As for dual nationalities, yes it is possible to hold both US and UK citizenships. At some point the US used to insist on the single citizenship thing but that is no longer the case for many countries, the UK being one. The US still insists that you'd leave and re-enter the US on a US passport though.

As to the pros and cons of holding dual nationalities...

Pros:
Can't be kicked out of either country. Entitled to settle and gain employment. Entitled to register to vote. If in a third country you have two (powerful) consulates at your back. You can use the fast citizens-only lines at immigration both ways!

Cons:
You can't get protection from the UK consulate whilst in the US or vice versa. You are eligible for jury duty in both. You could be called up for military service in both (again, with no protection, though neither country has the draft at the moment). Your ability to gain the highest levels of security clearance in either could be diminished, thus potentially jeopardizing some career paths. (Especially true if you choose to live in the other country - most high level clearances have residency requirements).


The NHS question is interesting. Beyond emergency care, it's hard to get much without a national health number, which I don't think they issue to non-tax-paying non-residents. Of course, you could settle in the UK to get the 'free' health care.

Another bonus of holding a UK passport is the right to live and work anywhere in the EC. Want to spend a couple of years living in Europe? It's a lot easier with a UK passport than a US passport.

You still wouldn't be able to legally travel to Cuba though. US citizens remain subject to US Federal Law even when they are not within the USA.