Duty Free at Heathrow is among the best places in the UK to purchase Apple products (but not accessories, which are usually actually more than in the High Street) as while not strictly VAT Free, they are considerably less expensive. I think you’ll do better than £600, but probably not the full 20% off.
You can also “double dip” with BAA’s Worldpoints, which can be quite lucrative if converted into bmi miles.
There is also a £5 voucher which will have a modest effect on the purchase cost:
Personally, I would buy a bog standard iPad1 on the cheap, and wait for the iPad3 with retina display, which can’t be too far off as I personally feel iPad2 is more of an iPad1.5.
iPad3 is rumoured to be premiering in time for Christmas…