Here's a thread that can help. It goes through all the questions people have had over the years on this one:
http://talk.uk-yankee.com/index.php?topic=4481.0Having said that, yes, you definitely need to have your child there--even if they are just a baby. If they are a little older, there's even a play area for the kiddos, which helps since you can sometimes wait for a long time.
And, no, a tesco passport photo booth won't work. They are different sizes entirely. There was a photo booth inside the embassy when I last went, but I wouldn't want to rely on that. It's really not that difficult to get US passport photos though--depending on where you live. Some use a snappy snaps that's close to the embassy. I didn't like that option--had enough to do and worry about that day. I felt much better having it all done already.
I took my little ones to a local photography supply store that also developed photos. They had no trouble taking the photos--even had special pillow things for the baby to lay on so they could have the right colour background without hands in the way--which can get you in trouble if you try to use a booth. DD1 was at a local shop that has closed down now, so I went down to Cardiff for DD2, and went to a Jessops chain. There are also places like snappy snaps around the country and local places. I even found some photographers themselves who were willing to do it. Just look up photography places on-line and start calling around. Even if they don't regularly do them, just take the sheet on the embassy website that tells you where to cut it, and they can do it for you.
I can't remember exactly which forms I filled out. I remember there were several things, so explore around all the links. Print out your appointment sheet from when you make it. You'll need the application filled out for the registration of the birth, an application for Social Security (that's a separate page too--done at the same time, but you need the form), and the application for their passport.
One note that can be easy to miss is that your spouse will either have to come with you or you will have to print off the form from the embassy that says your husband agrees to the baby getting a passport. If you use the form because he can't come with you, you'll need to get a solicitor to certify it where it asks for a notary. Then don't forget passports, long-form birth certificates, etc.