Steph at the UK's department of Innovation Universities and Skills has created a useful site for tracking Web 2.0 innovations in the UK. He has delicious tagged 74 examples of Web 2.0 use in the UK and invited people (including of course the originators of new projects) to continue to build the catalogue by using his tags. see the site at http://sandbox.dius.gov.uk/digitalgovuk/
A collection of mostly DC centric "government mash ups" but the second commentor has already added some UK links. There are some interesting projects in there (and a few silly city guides that do not seem to fit the attention grabbing headline at all).
Another useful site which is a wiki trying to pull together "best practices" in relation to Government 2.0. Plenty of examples here - some of which are no doubt true great practices, others perhaps not. http://government20bestpractices.pbwiki.com/
All UK public sector organisations have a duty to inform the public of their policy on publishing information and have their policy endorsed by the Information Commissioner. To help this process the UK Information Commissioner has published a model publication scheme. It seems pretty good and is a good encouragement for more transparency. http://www.ico.gov.uk/Home/what_we_cover/freedom_of_information/publication_schemes/publication_schemes_eng.aspx
http://www.e.govt.nz/resources/research/progress/agency-initiatives/chapter6.html "Agencies are recognising that the social and community dimension of these tools enhances their ability to involve and engage people more directly. They are being used to enable people to participate in proposing and shaping policies and laws, and to reach different and broader constituencies. People are providing feedback on programmes and services, and in some instances are beginning to influence service des...
Very useful site bringing together (on a wiki) all the things UK local authorities are doing in terms of using Web 2.0 to reach out to citizens: http://localgov.pbwiki.com/ .