Basically, I've been hanging out every day in Silicon Roundabout, and it's starting to feel pretty interesting. It's got some of the things that the rest of London lacks:
- Public third-spaces have free WiFi and power points all over the place. Contrast this with a standard central London Starbucks.  The only big difference between London and San Francisco is that in London the wired third-spaces are pubs; in Silicon Valley they're coffee shops.
- Lots of Class-Z office space. Nobody's trying to tear down everything they see and put in Marc Jacobs boutiques and Class-A office space. The fact that there's office space that's actually affordable is a big plus.
- Lots of startups. There are all kinds of small tech and media companies around seeding each other with ideas. People working here know each other and can meet up easily for beer after work and weekday meetings.
- Lots of Vietnamese restaurants. Maybe it's my personal experience, but grabbing the team and going to get Pho for lunch is part of the Valley experience to me. 
- People doing deals. Everywhere around there are people obviously getting Deals done. Funding deals, consulting deals, hiring deals, it's all happening. You can feel it.
- Non-traditional-appearance people. Artists, piercings, nobody wearing business attire, it's all there. Much more techie than the traditional City/Wharf culture.
Fund Firms To Build A Tech Cluster
You want to know what would make this really gel? More funded startups.
There's a general sense these days that any new tech startup requires like 2 guys, some Merb/Rails, a couple of MacBook Pros, EC2, and you'll have a million users overnight. Why take funding? Why invest? Why not wait for commercialization?
Because you take the long view. Because you realize that creating a culture of early stage startups requires a culture of entrepreneurship. And because you know that only funding companies leads to spreading that culture of entrepreneurship to new people. And, even more importantly, because there are a lot of ideas that actually do require more than 2 guys + laptops; they require some pretty substantial up-front investment to pop, but the pop is probably going to be bigger as a result.
But that takes ideas that require funding, and a willingness to invest in early stage companies. There aren't a lot of angels around at the moment (if nothing else, the financial implosion hits them first), and London's been so expensive that most techies of sufficient quality don't have enough savings to bootstrap for a year. So you need a bunch of people looking at interesting IdeaCos, and investing in them.
The Kirk Story
Perhaps the most important thing that happened to me to incubate my personal culture of entrepreneurship was taking a startup job straight out of University (Go Bears!). That changed my worldview so dramatically that when I then went on to work for WebLogic (just after BEA acquisition), I thought that 2000 person company was monstrous and bureaucratic. I couldn't wait to get back to a startup. That's how you build a tech community: you infect people with the startup bug. 
When I moved to the UK from Silicon Valley for personal reasons, I wanted to continue that culture of startups, that constant entrepreneurship. But when I looked around, I realized that the only way to live with a reasonable standard of living was to dive into finance.  VCs I met with tried their hardest to get me on board with one of their portfolio companies, and even asked me whether I had an idea they could fund (which I didn't, and even if I did, I didn't have the local network at the time to put a deal together). I viewed working in finance as the best chance I had to build a life for myself in London working in software development. 
I think things have changed. I think London is the place, and now is the time.
Why London Now?
So if you're reading this far, and you have a few quid to invest, here's why I think this is exactly the time to push hard-core into technology companies that require up-front investment in London:
- People Are Available. The Credit Implosion has really started to hit financial IT.  This makes the calibre of people that you need to do startups available, and it's only going to get worse/better from here. Infect them with the bug, make it clear that they can do tech startups and be able to live in London and maybe have something pop, and you've got a culture going.
- Sterling Is Worthless. $1.366 as of Friday close, even worse in Euros. Nobody denominates VC funds in Sterling. Invest here while you can. Seriously, even alpha developers here are earning at market exchange rates monstrously less than they are in the Valley or New York.
- We Have The Basics. WiFi/Power Points, Vietnamese Restaurants, Cheap Offices, Public Piercings, it's all here. 
- We're Not USAia. We can draw on skills (language skills, cultural affinity) from throughout Europe , we understand European culture isn't the same as California, and we can better target consumers and businesses in Europe/Middle East/Africa. North America is roughly 350MM people, EMEA is circa 1000BN (maybe more).
- We Speak English. Even the Americans here (guilty!) speak some bastardized form of the Queen's Tongue. For global businesses, where you want some real language skills and native English, we can put it all together in one location.
- GMT Rocks. We have business hours overlapping with San Francisco, New York, Moscow, China, and (at a stretch) Japan. It's one reason why finance firms flocked here, and tech firms can leverage it too.
I fervently believe that if you infect enough Londoners with the startup bug, we won't get cured. We'll be just as driven as the Valley folk. You just have to infect us.
But don't think that you're best served in making a big PR splash, opening a fancy office, and then not investing. It's still embryonic here, and you're going to have to help entrepreneurs by funding people you feel have talent (but maybe not just yet...) just as you would in the Valley. Make a long term commitment, and take advantage of current troubles to make it a cleaner short-term bet. You'll find that you have a stable of entrepreneurs and experienced techies that can really make great things happen.
 This sounds utterly trivial and stupid, but it's a real sense of the types of people you expect to be hanging around. If you've got free (not wireless-company-paid, not pay-per-day) wifi, and power points, you expect people to be hanging around and doing stuff. Stuff that involves the intertubes.
 My tips: Song Que in the Kingsland Road Vietnamese strip; Green Papaya if you're willing to voyage way out to Deepest, Darkest Hackney for fantastic food; Cay Tre if you want to stay close to the office.
 People from Radik have gone on to Yahoo!, Google, Intel, Duke University, VMWare, Nuova, TellMe Networks, Gunderson Dettmer, Intuit, MobSpin, LucidEra, Required Technologies, ..... A good startup has a fantastic alumni legacy.
 Yes, I've told this story before. Forgive me for becoming my mother.
 Have I mentioned I'm unemployed yet? Sorry, that mother thing again.
 Hey, still unemployed here!
 Just to point out, this is largely from my recent experiences in Silicon Roundabout/Hoxton. There are a lot of similarities with Bermondsey, which is where I'd personally put a firm I founded (mostly because Hoxton Square takes much longer to get to from where I live), and has a pretty similar vibe (if smaller). If only it had a reasonable Vietnamese restaurant...
 EU Free Movement of Labour doesn't just apply to Polish Plumbers, it's also applies to software engineers and business guys from everywhere in the EU.