The Lib Dems have launched (or is that re-launched?) their anti ID card website, to campaign against the inneffective white elephant. It has been incredibly depressing of late, with legislation in the works to effectively strip away many legal protections, including the six month prison sentence without charge (otherwise known as the three month holding period). The number of times Charles Clarke has said 'The police say have said they need this, and that should be reason enough to extend the period' is unbelievable. Not so long ago, there was the case of the West Midlands serious crime squad who took 'unusual' steps to ensure that if you were a wrong 'un you got locked up, despite what the evidence said. , the police probably believed at the time that they were acting for the public good, but the powers that be said not.
The job of parliament is not to simply give the police any power they want, but it is to balance these requests against other concerns. For example, the disruption caused to any innocents detained under the legislation, or the possibility of negative side effects, e.g. the three month detention being a recruiting call for the people you are trying to stop. It is for this reason that we have things like habeus corpus (i.e. one needs evidence and a trial to remove liberty).
ID cards fall into a similar category, they inconvenience innocents, will be expensive, and also not effective - the Madrid bombers all have solid ID, as the London bombers would have done.
More than this, the system is likely to give false negatives (what do you do when the card says you're not who you say you are... the computer never lies, citizen!), much worse is when the computer gives a false positive, falsely identifying a person as someone else - this will give weaker security as people will trust the cards and common sense observation becomes less important.
This is peripheral to the main point that the cards fundamentally change the relation with the state, and that even if the system was foolproof, a terrorist who has yet to commit an act of terrorism will have ID that looks just like anybody elses.
The danger in giving the government and police too much power is that this can make government into the biggest threat to us all, one might conceivably trust the current government not to abuse such power, but can one really trust every future, as yet unknown, government not to abuse these powers?