You need to make sure that what you can claim back (equipment, travel, tools, etc.) is greater than the VAT you collect by adding VAT to your Invoices. If it isn't, then you act as an unpaid tax collector for the VAT people. Obviously, once you reach a certain turnover, you have to become registered anyway. My advice is to check carefully before taking the leap!
Another point many people like to consider, is how much of there business is commercial or domestic. Obviously if you are mostly dealing with businesses, they like to claim the VAT back so being VAt registered is an advantage!
You can register for VAT at any time if you want, if you go past the £65000 turnover point then it becomes compulsary.
As Leo pointed out, it depends who your cusomers are. If its domestic and you are Vat registered, then you are 17.5% more expensive than someone who is not, as Joe Bloggs cannot claim Vat back.
However, if your customers are commercial an themselves Vat registered and you are not, then they cannot claim back the Vat on the materials, now making you 17.5% dearer than someone who IS Vat registered
The result is, (as I found) commercial customers will then want to supply their own materials, and bang goes your profit margin on the bits, and as my work is all commercial, I registered.
You can of course unregister again.
It realy depends on the sort of work you do.
Another note worth mentioning is if you hate paperwork (as most of us do) get a book-keeper to lookafter your Vat returns (and books). It is worth it in the long run.