This is quite a good summary of the UK law:

http://en.wikipedia.org/wiki/UK_citizenship#British_citizenship_by_birth_in_the_United_Kingdom
(from there down)

edit: As far as I can tell, Heather is still able to register for British citizenship, it might be a good idea to do it anyway just in case they decide to change the rules at some point, free access to the EU will always be handy.