Why were the team so convinced this was real?
The exercise was organised in great detail so that the experience would be as close to reality as it could possibly be.  If the team had been convinced that the attack was a fake they would almost certainly have reacted very differently and it would have been impossible to judge what would happen in a real situation.
 
The exercise was carefully co-ordinated so that the team were unable to get any information that might contradict what they were to believe was happening.  VX was chosen as a weapon because its incredibly deadly nature means it would both pose a serious threat to the country, and also mean the team had to seal the Grid and cut themselves off as much as possible from the outside world.

Could terrorists really use VX?
VX is the deadliest nerve agent ever created, you can read more about it in the gadget guide.  It is extremely unlikely that a terrorist could ever use it, but it is possible.
 
The manufacture of VX is an incredibly complicated and dangerous task.  It requires a laboratory equipped with sophisticated equipment and a range of toxic and corrosive chemicals.  A terrorist group would have to have access to skilled chemists if they wanted to produce this substance.  
 
It is more likely that they would attempt to steal VX from a weapons depot of a country with the substance, and the only countries that admit to having VX are the USA and Russian.  There are suggestions that Iraq may have it, but it’s never been proved.  However, even if a group managed to get their hands on a VX based weapon they would find it incredibly difficult to handle without killing themselves in the process, so they are more likely to use a different form of attack.

Could this kind of terrorism spill over to the UK in real life?
It is certainly not inconceivable that the UK would be at risk of an attack with biological weapons.
 
At the beginning of 2003 a number of people were discovered to be manufacturing ricin, a deadly biological agent. The British government has also ensured that the health authorities are well-stocked up on smallpox vaccines.  
However, although there are persistent rumours about specific threats, the police are at pains to point out that they have no information suggesting these are accurate.