If instead of using cookies we would swap to using the browsers storage, wouldn't we circumvent this entire rubbish law (+ the other advantages it already provides)?
Paragraph 2 then sets out how consent needs to be obtained, and the test that the subscriber needs to have given their consent before information is stored on their computer.
Cookies, flash cookies, HTML5 databases, etc. are all covered under the general concept of storing on a subscriber's computer.
The original law is here - http://www.legislation.gov.uk/uksi/2003/2426/regulation/6/ma... - and here are the recent amendments - http://www.legislation.gov.uk/uksi/2011/1208/made
"Sure, they requested the web site, but they never explicitly said they wanted the image, and now you've gone and stored it in their cache."
I'm not a lawyer though, just a British web developer who has had to comply with this law.