Can anyone who has a real internet merchant account with a uk bank give me information on setup cost, discount rate, how hard it was to obtain etc..

Please dont recommend using something else to start off with, i already know all about them.

Thanks.

With the major highstreet banks such as the below. Discount Rate is usually 3% with a transaction charge on top of that usually less than £1. Setup fee from £200-£600. And then rental of equipment or software. They have strict requirements not like in the US where 98% people are approved in days, it takes weeks in the UK. If you're not resident in the UK don't expect to have much chance of getting one.

NatWest (www.natwest.co.uk)
Barclays (www.barclays.co.uk)
LloydsTSB (www.lloydtsb.co.uk)

Best bet is to use third-party worldpay.com for UK transactions.