Arnie,
It wasn't the cost - it used to be only £150.
What kept us from applying was that I would have to send in my passport as well and then it would take 2 to 3 months to process. Each time we thought about it - there was either a holiday coming up or I had to travel on business, so it wasn't convenient to send the application in.
In November we decided to finally bite the bullet and only then discovered the new requirements! The exam needs to be taken first, and I could not answer some of the questions (and I'm not exactly ignorant of british history etc!). There is a book that needs to be studied about the British way of life, judicial and government systems.
There was a little bit about it in the press at the time - they published some of the questions and noted, as above, how difficult they were. I remember that one of the example questions asked what people from Newcastle were often called - the answer was 'Geordies', and another question was about which court did what , the answer was 'Magistrate court' (you see, I still don't know the question..!)
As it stands, my wife is studying the book but as there is still a 3 month waiting list after the application goes in, she won't be able to apply before we go to Dubai. And the perverse laws are that as she won't then be resident in the UK, she can't apply! (That said, she has a permanent visa in her passport so that the only time a British passport is of any use is when we are travelling to another country - eg UAE!)
Cheers,
Shafique