It really isn't recommended to hire a car to drive around London. We have a perfectly acceptable public transport system of the tube, trains, and buses, run by Transport for London.
Like most major cities, London's streets are over-crowded so the Mayor of London introduced the Congestion Charge. This means if you want to drive into central London between 7am and 6pm on a weekday you must pay the charge (£8 per day in 2007). The Mayor's office tells us that "London suffers the worst traffic congestion in the UK and amongst the worst in Europe", and that "drivers in central London spend 50 of their time in queues".
Most Londoners have reacted well to congestion charging. I for one have never had to pay the charge as I've never found a reason to drive into central London during the week. Sometimes I drive in on the weekends, but it's so rare it's not worth mentioning.
Learn more about congestion charging at: www.cclondon.com.