Personally, I don't live in fear in the UK (and I rather pity anyone who does). Why? My chances of being killed or injured in a terrorist attack are about equivalent to my chances of being killed by lightning, and significantly lower than my chances of being killed in a traffic accident.
While I'm somewhat skeptical of your injunction to engage extremist leaders in 'dialogue', Andy, I completely stand by your excellent statement of refusing to give these thugs what they want by allowing fear to dominate your life. There aren't many occasions where I agree wholeheartedly with a public speech of Tony Blair's, but I do remember as a teenager watching his response to the 7/7 bombings, and I vividly remember the impression one part in particular made on me:
"When they try to intimidate us, we will not be intimidated, when they seek to change our country, our way of life, by these methods, we will not be changed.
When they try to divide our people or weaken our resolve, we will not be divided - and our resolve will hold firm. We will show by our spirit and dignity and by a quiet and true strength that there is in the British people, that our values will long outlast theirs.
The purpose of terrorism is just that - it is to terrorise people. And we will not be terrorised."