Well I know where you are coming from Alice_chained. I had the same problem and I am also in the UAE. I got most of my docs notarised from India when I was there in Jan'09. Getting docs attested in the UAE is a process I am not clear/familair with. I do not think they would need passport copies notarized since you will eventually need to send in the originals for stamping anyhow. The notary in Dubai is very expensive and initially I ended up spending many 100s later to realize that it was futile.
The wording on the London forms seems to be a little ambiguous since on the top it says notarize all copies and then at each segment it specifially states when/where we need.