From a BT customer in the UK:
I've seen no filter whatsoever. I believe this is being rolled out to new customers only (and only with the 4 biggest ISPs), with it becoming available to people like me at a later date. Whether "available" means opt-in (fine) or opt-out (which I think would be a breach of contract) remains to be seen.
It's not just a porn filter, it can block multiple categories, including social networking sites, sports sites, video sites - virtually every post in this thread refers to porn, but it's far more wide-reaching than that. In principle, it's actually far more useful than a simple porn blocker.
There have been multiple stories of various parts of gov.uk being blocked, and also the personal websites of several MPs including those who pushed it through. I can't confirm any of this because I don't have the filter.
Myself and a few others have been pushing BT to provide a method of checking which sites are blocked and why (I run multiple websites, so it'd be useful), but the stock reply so far has been "we cannot do this as the service is provided by a third-party" who they refuse to name.
I see no harm in a billpayer-activated filter if people want it, as long as it's an opt-in service that's properly anonymized and it's made clear that it's only a crude way of preventing unsuitable content which will always be flawed at some level. We are, however, seeing more and more attempts by the government to try and grasp some sort of control over the internet. This is the aspect I find troubling - mostly because it's like hearing our politicians seriously discussing how they're going to turn the moon inside out, it's smacks of "not even understanding the problem you're trying to solve".