Human Rights Act (HRA 98) was enacted by Parliament as part of an idea of "Bringing Rights Home." Convention rights were to be a floor and not a ceiling for human rights protection in the UK. The Act actually came into force on 1st October 2000.
The HRA98 does a few apparently straightforward things.
(1) courts must take into account various matters including judgments of the E Ct HR; (2) so far as it is possible to do so, courts are commanded by Parliament to read and give effect to national legislation in a way which is compatible with convention rights; (3) if a court (High Court or higher) is satisfied that a provision in legislation is incompatible with a convention right then the court MAY issue a declaration of incompatibility; (4) IF a declaration of incompatibility is issued by a court then the legislation continues in full force unless and until Parliament chooses to alter the law - (which normally it has done); (5) the HRA gives Ministers a right to being forward a "Remedial Order" as a fast-track method of amending the law but Ministers do not have to proceed in this way and the government could either do nothing or amend the law by bringing forward new legislation; (6) Public Authorities (e.g. Local authorities, governmental bodies) must act compatibly with convention rights (save where statute prevents them from doing so). It is also worth noting that, if a court is considering making a declaration of incompatibility, then the Crown (in effect the government) is given a right to become a party to the proceedings.
This is an ingenious scheme designed to retain the right of Parliament to legislate as it wishes (i.e. the Legislative Supremacy of Parliament) but, at the same time, enabling the courts to bring to the attention of Parliament any areas where the law is considered by the judiciary to be incompatible with the convention. This ingenious scheme, with its apparently straightforward ideas, has produced an enormous amount of comment (judicially and otherwise). Some politicians have made no bones about their desire to see the repeal of the HRA 98. Some might substitute some form of British Bill of Rights and others might put nothing in its place.
In making decisions about compatibility it is only natural that the courts would look to see what the E Ct HR has said and it is also equally natural to adhere to the Strasbourg interpretation unless there is some good reason not to do so. This is the "mirror principle" - articulated by Lord Bingham in Ullah v Special Adjudicator 
UKHL 26,  2 AC 323. That seems to be a reasonable way of looking at what Parliament itself has commanded the judges to do - i.e. "take into account" the view of Strasbourg. What might amount to a good reason not to follow Strasbourg is clearly a problematic matter and is discussed in the earlier post "Thoughts on the Supreme Court's decision in Chester and McGeogh" - 21st October 2013.
If, having taken into account any views of Strasbourg, the court considers that legislation is incompatible then it MAY issue a declaration of incompatibility. The court does not have to do so but that raises interesting questions as to when would it not do so and why not.
In the Nicklinson judgment - handed down by the Supreme Court on 25th June - the court could have made a declaration that section 2 of the Suicide Act 1961 was incompatible with Article 8. The court declined to do so. Only Lady Hale and Lord Kerr would have issued such a declaration. Suffice to note here that the court has given Ministers and Parliament an opportunity to address this complex topic.
An Assisted Dying Bill is before Parliament but this applies to the terminally ill - very basically, expected to die within 6 months (see the Bill Clause 2).
Addendum 9th July 2014:
See the post of 25th June - Assisted Suicide: the cases of Nicklinson, Lamb and Martin