A weird thing about driver's licenses and other IDs, vs. here

Yes, certainly, the UK licence is valid in the US. I have used mine many times to rent cars there.
However, the converse is not true....

Actually it is. You can us a US license to rent a car in UK.

Ehem...quoting the rest of the sentence...

However, the converse is not true - if you have resided in the UK for more than one year, your American licence is considered invalid here.

The key is "resided in the UK for more than a year" and the rest of misch's paragraph explained that you're not covered by insurance and this is the reason why it is invalid.

This was my own experience as well. My policy stated that I could drive on my US license for up to a year, and then I had to have a UK license after that; my insurance wouldn't cover me until I got it.

And, I agree with Rosie.
I was told by my own examiner, "believe it or not, we do not try to fail anyone" and he went on to explain because when they do fail someone it just makes their own job busier because they'd have to retest them. Their point system is pretty rigid, and because of the way it's set up (and for how long most have been doing it) there leaves little subjective doubt of whether or not someone has done A or B...where A might be looking in a rear view mirror at a junction, or B might be signalling a turn at a roundabout.

But intentionally getting someone to a test late so they'll fail and have to take more lessons...fodder for thought. I don't necessarily agree, just I've never thought of it that way.

The key is "resided in the UK for more than a year" and the rest of misch's paragraph explained that you're not covered by insurance and this is the reason why it is invalid.

I know that.
Misch's opening comment:

Yes, certainly, the UK licence is valid in the US. I have used mine many times to rent cars there.

The "there" comment rather implies the licence being used where the holder is not a resident so, to that extent, the converse IS true.....

ooooh, so, if I did NOT live in the UK, but came as a tourist, I could use my US license to hire a car in the UK, no matter if I toured this year or next year or the year after that, right?

Hmm, good point. Even though that aspect hadn't been brought up in the discussion, I'm fairly sure no one questioned that part, though. But it's a good point to make for those just visiting the UK and not needing to know the regulations about actually living here.

Oh dear! I had no idea my US licence was invalid now. I renewed my US licence two years ago through the mail. I thought as long as you had a US licence that wasnt expired then you were still valid.

So if I were to choose to return to the USA for residency, would I have to start from scratch and retest?

I would imagine if you walked into the license renewal place in your (same) home state and wanted to change it to reflect your new US address, and it hasn't expired, or it's within a year after expiration, you could renew without taking any tests, except perhaps the eye exam. The people on the counter will take your money and smile and wish you a good day. They won't be interested in where you lived before or what you used to drive on.

The main thing is if you are driving here in the UK and have lived here more than a year. If you are not driving here (or not using your US license to do so), then no worries. I have my US license as "just another photo ID". I don't use it to drive here. Yet, if I moved back to the US, I'd probably change my address on it and use it just like I had it all along. I don't use it to hire a car in the US. I use my UK license to drive. Period. MY US one is nothing but a piece of paper right now, inactive, just a lousy picture of me. 

hiya, just thought i'd add my two penneth worth here......for those with a usa drivers license, what it actually says about driving here with it is........your u.s license becomes invalid a year from your last visa entry........so what i suggest is u hop across to france, get your visa stamped & VOILA!..........& i know ppl who do just that lol.....or alternatively, apply for an international drivers license, u can find sites on the internet for this.........hope this helps some of u  ........love susie xx

I want to stress that it's important to check with your insurance company.

hiya, just thought i'd add my two penneth worth here......for those with a usa drivers license, what it actually says about driving here with it is........your u.s license becomes invalid a year from your last visa entry........so what i suggest is u hop across to france, get your visa stamped & VOILA!..........& i know ppl who do just that lol.....or alternatively, apply for an international drivers license, u can find sites on the internet for this.........hope this helps some of u  ........love susie xx

NO! Completely false.

Here is the brochure of the DVLA explaining the difference between visitors and residents.

www.dvla.gov.uk/forms/pdf/INF38_040803.pdf

Residents who have relocated here from the US must obtain a British licence before driving here for one year on their US licence. Going to France for a day and coming back has absolutely no significance to this rule.

The DVLA gets to determine who is a "visitor" and who is a "resident" for these purposes. You will most certainly NOT be considered a visitor if you have your habitual residence in this country and pop over to France for a day. Like I said, it means nothing, you're driving illegally as from day 366.

Your British insurance has no obligations to you if they discover you are driving illegally. You could also be fined or imprisoned for doing so.

Doesn't sound too swift, IMHO.