BMI is indeed the governments preferred measure of the nations health, primarily because it is easy to calculate and interpret. The medical community is currently preferring waist hip ratio, which gives a decimal result. This is considered more difficult for the general population to work out and interpret so has yet to gain government backing. The ideal ratio is also different for men and women.
BMI is wildly inaccurate for most people since it makes no allowance for body shape or fat/muscle ratio. You could do a percentage body fat test (posh scales or ask your doc) to get a good idea of whether you are too fat or not.
For the record I am 6' tall, size 11 shoes, size 12 boots, size 13 motorcycle boots. BMI - somewhere in the region of 32, morbidly obese. I can hammer round a squash court 3 times a week and run 10k in under an hour however, so I tend to ignore the BMI bit!
Quick test for you, if you sit in a chair and cannot see your belt because your stomach gets in the way, you are probably overwieght. If you stand up and cannot see your feet you are definately overweight!
Steve.