You have to go to Hay-on-Wye. The entire town does nothing else.
You’ll probably need a car to get there, though
Haaha - I was sort of going to say that too, but thought it might not go down too well. 
btw - someone also mentioned the Lake District? My own prejudice would be - yes DO visit there, but it might be best to avoid Windermere - busy busy busy 
Hmm - how about Glastonbury, in Somerset, Elysian? And perhaps visit Winchester too, where you can say hello to Jane Austen’s grave. (OK, not quite the same as books, admittedly)
Scotland. Scotland is awesome - I just can’t recommend it enough. I did the Lowlands, Highlands, Orkneys, Shetlands, Hebrides, and a Gaelic festival in 5 weeks, so I’m sure you can see a lot in two. The thing about Scotland is that it’s quite small, land-wise, but there is so much to see! As others have mentioned, take the train to Inverness. After you have poked around there, you can take the train to Thurso.
Thurso is really nice - there is a fablous hostel there called Sandra’s Backpackers Hostel , they have private rooms with a double bed for 25 Pounds a night (or they did in the fall). They also include breakfast, and all the tea a biscuits you want, and the place is run by the nicest couple - picked us up at the train station, and dropped us off at the ferry! So it’s really more like a B&B, but cheap!
From Thurso you can hike past the ruins of Thurso castle to Dunnett Head, the true Northern tip of Scotland (don’t know why John O’Groats got the honours there). Nice hike - lots of views and friendly sheep.
Also from Thurso (actually from Scrabster, but it’s only a mile away. Scrabster - hee hee, sounds like an STD, doesn’t it? “Stay away from her, she’s got the Scrabster!” Anyways…), you can catch a ferry to the town of Stromness on the Orkneys. The Orkneys are the most picturesque and easily accesible of the isles, IMHO. They are not as remote as most people think, but they are beautiful - so much to see! Skara Brae is the best preserved Neolithic Village in the world, Brogdar’s Ring is like a version of Stonhenge without the tourists and traffic and admission fee, the Italian Chapel is an amazing piece of art and history. Also, the Orkneys are quite affordable compared to much of Britain - the ferry over a bit pricey at 30 Pounds a person or so, but after that it’s pretty reasonable.
Anyways, that’s all, sorry for writing a novel here. I was just so amazed by it all! And no, I don’t work for Scottish Tourism or anything.
Here’s some sites:
The Orkneys:
Thurso (also good for the rest of Caithness):
http://www.caithness.org/atoz/thurso/thurso.htm
Sandra’s Backpackers:
http://www.sandras-backpackers.ukf.net/
For pubs, there’s the Haunch of Venison in Salisbury. Very old building. The food quality varies as the thing changes hands, but it’s my favorite eatery/drinkery in GB. Stonehenge is definitely worth going to, as is Salisbury Cathedral and the often-overlooked Old Sarum
In Oxford there’s a local beer called Morell’s, which, if you can still get it from wooden kegs, is my favorite bitter.
The Cotswolds are great for walking (Chipping Camden is an especially nice village). And so, of course, is the Lake District. I don’t know if the mad cow scare is still messing up country walks, though.
BSE never affected public access. Foot and Mouth, which is probably what you’re thinking of, did result in a lot of footpaths etc being closed of. AFAIK, that’s all in the past.
Obviously marks you out as a doper with class 
For the best pub food in Oxford, it’s either The Trout or The Prince of Wales (especially on Sundays)
Directions? Find river, turn right for the Trout, or left for the Prince of Wales (that’s a long walk )
Hadrian’s wall is nice, and the castle at Edinburgh.
[HIJACK]
I wish that such a thing were still possible. I apologize profusely for quoting myself here… but Morrell’s was sold in the late 90’s to the guy who owns Fuddrucker’s. The brewing operation was closed down. I think the property, in downtown Oxford, was worth more than the family could make from selling beer. (The pubs have since been spun off, and Morrell’s brand beer is now being brewed elsewhere.) According to the widow of one of the last Morrell owners (a distant cousin), the brewing operation was losing money hand over fist at the end.[/HIJACK]
So far, it looks like the pubs in Oxford that I must visit are:
King’s Arms – not good
Chequers – okay
Turf Tavern – the best
The Goose (either the best or alternatively spiritless)
Jericho
Radcliffe Arms – cheap but good
Bookbinders’ arms – fun
The Trout – the best
The Prince of Wales – also the best
Goodness me. It seems like there is no consensus on the “best” pub in Oxford. Make up your minds, will yah???
I suppose I shall just have to visit them all and see which one is REALLY the best. Darn, what a waste of perfectly good study time.
If you are centered in Oxford, I would recommend trips to the south coast. There are great public paths along the entire coastline and the walks are exhilarating. Another lovely area is the New Forest, just west of Southampton. Again a lot of paths to walk, and on a lovely summer day (England does have them you know) it is a magical area. And it’s funny how England can call something a “New Forest” for over 400 years.
There is a lot of great advice given previously, and my suggestions repeat some of what has been said. But, I love the area so much, I must say it myself.
If you can get farther afield, go to Yorkshire. The Yorkshire Dales also has lovely scenery, great walks, fine B&Bs and typically brilliant pubs. There are lots of books or websites that can give options of walks to take. This is the area James Herriot worked in and the TV series was filmed. If those books or shows have ever interested you, there is the Herriot Museum in Thirsk, just to the east of the Dales. There is also Theakston’s Brewery in Masham. I think they still give tours. This is the place that brews Old Peculiar.
As long as you are up in the area, go to York. An incredible City with visible history dating back to Roman times. It’s my favorite place in the world. Among other sites, and just walking the narrow streets of The Shambles, is the Railway Museum. Passenger rail started just a bit north of there and the museum gives an interestign account of the history.
Farther north is Edinburgh – another fantastic City with incredible history and sights. But, wherever you go in England, Scotland, Wales, N. Ireland or Ireland proper, it is hard to go wrong.
Whenever people mention Stonehenge in threads like these I feel the urge to recommend the Uffington White Horse - to me, at least as impressive as the henge, far less touristy, and in a nicer setting too. It’s an ancient stylised figure of a horse, probably Bronze Age, cut into a hilltop about 15 miles SW of Oxford. It’s close to the Ridgeway path, so you could combine it with a day’s hiking.
The white horse is cool- it’s on the way to Avebury from Oxford, actually. You can see it from the motorway. (or was it an A-road?)
The Goose was where we single male grad students wished we’d figured out to go earlier on in our stay. Not that grand of a pub as far as atmosphere goes.
The White Horse is interesting for htat- it’s more or less across the street from the old Bodleian library, and is a hole-in-the-wall.
One more pub you might like to check out- if you’re a literary type, the Eagle & Child on St. Giles is where J.R.R. Tolkien, C.S. Lewis, and their literary buddies hung out and drank beer.
How timely. I’m leaving for 9 days in London in 2 weeks.
I got a cheap single-room hostel here: http://www.anaussieinlondon.co.uk/london_hostels/index.html
Not exaclty B&B, but inexpensive.