Yes, there's different rules for different countries. I think the UK has changed it recently, so having a British grandparent doesn't always mean you qualify for a passport. Unfortunately Wales is the only country I have family ties to, which obviously doesn't help me too much.
I never realised you could hold 2 UK passports. I guess it makes sense if you travel a lot.
My friend takes great pleasure reminding me she has an EU passport and I don't. She's never lived in the EU, but her grandparents were Italian immigrants and she still qualifies for a passport.
I'm going to make you jealous when I tell you I might have TWO blue passports by the end of the year. I need to renew my UK passport and I'm waiting for my Canadian citizenship application to be processed.