There has been quite the hullabaloo over the Church of England's response to the use of Manchester Cathedral in Resistance: Fall of Man.
As I don't yet own a PS3, haven't played Resistance, and am certainly not an expert in the laws of the United Kingdom, I will direct you to this account of the case. The Wardman Wire does a quite thorough job of explaining the UK legal issues involved.
Interestingly enough, the architectural copyright issue is becoming quite widespread in the US. Since the passage of the Architectural Works Copyright Protection Act of 1990, architects have been granted protection both for the plans and "the design of a building as embodied in any tangible medium of expression."
What does this mean for game developers? Well, if you put an exact replica of a real building in your game, the architect could come after you for infringement. Remember, a video game, like a photo or a film, is a tangible medium of expression, even if the building in it isn't a physical building.