But if the seat is already set to be taken by Lib Dem/BNP than your 1st preference is irrelevant anyway if you're sure they won't win. You may as well not vote for them and keep the BNP out, which you'd do in FPTP anyway. Also, Lib Dems have been calling for an alliance with Labour under AV. That's still calling for a tactical choice, no?
Edited my post while you wrote this one and that's sort of the answer to what you said here. You say that the 1st preference is irrelevant since they won't win anyway. This is the main false assumption. It may be irrelevant in the first or second AV cycles, since they are the weaker party. However, usually the reason they 'wouldn't win' is not that they are unpopular per se, it is that people never voted for them under FPTP because they strategically voted. Put in the AV system and parties like the Greens Party or Liberal Democrats, which aren't necessarily ideologically unpopular but haven't gotten votes because of FPTP, will start to win elections because people will actually be able to vote for who they want as opposed to strategically voting. You're saying you may as well vote for the Liberal Democrat to keep out the BNP guy, but surely it is better to vote for your actual preference while still being able to express your opinion that the BNP guy would be a piece of **** and that you'd way rather have the Liberal Democrat instead of him if it came down to that.
I'm not saying it eliminates tactics or politics or anything like that, those are inherent to the political system, but I would much prefer a voting system where I could express my political preferences without having to tactically vote (as in not voting for your first choice for strategic reasons) while still being able to say that I don't want a certain candidate to win. But again, AV certainly isn't perfect, it's just that anything else is better than FPTP.