Maplin is selling GU10 Reflector Bulbs for £6 each. These are fluorescent, and at 7W have the same light output as a 35W bulb.
24 December 2007: Interesting Discovery
We still have a pair of halogen downlighters in our kitchen, with three 20W bulbs in each. Each unit is capable of taking four 50W bulbs. The fuse popped in one of them the other day, and I discovered that the unit needs a 1.25A (240V) fuse. Replacing it with a 1A fuse wasn't good enough; it popped again after just a couple of hours runtime. This means that the transformer is using around 250W continuously, despite having only 60W in total (in our case) of bulbs to power. We were thinking of replacing these bulb with LED low power lamps, but how much power would we be consuming? Yep, still 250W.
Basically there is no point using low-voltage LED bulbs to save electricity and money, unless you replace the transformer too. If you have recessed ceiling lights, where each light has its own transformer, you should be able to feed loads of LED lights off one transformer and get rid of the other transformers. If you did this, make sure that the light casings are suitably marked so that the next owner doesn't go and stick in high-power halogen bulbs! At worst they would blow a fuse, but that's not very nice is it?
29 December 2007: Correction Regarding Transformers!
A transformer will only draw as much power from the mains as it supplies to the load (eg, the lightbulbs). To confirm this, I did a current check on our kitchen light fitting with three 20W halogen bulbs in it. The current drawn was 0.22A, which at 240V is 52.8W. This is well below the 300W rating of the transformer. Therefore you can replace your halogen bulbs with low-energy varieties, and be confident that you are saving a good deal of electricity.