The definition of "habitable" in the Regs is poor and plain bad english. But what you're suggesting wouldn't constitute habitable.
To some extent, habitable is to do with 'intent'. You can sleep in and occupy a room without a ring main or heating, but you are intending to habitat it. Using as cellar, utility, storeroom means means you do not intend to habitate and do not require special checks. Your plan would come under "utility" use, imho.
Internal alterations like this wouldn't require planning perm. You are only,basically, doing some "change of use". But these days, it's impossible to know where Building Regs apply and when you can happilly do minor internal work without informing them.
The only thing BRegs could really moan about is stuff related to Fire Regs, imho --- and that would be very fussy, if we're talking just a WMachine running. Phone them up and sound them out... there'll be no obligation. If your alterations are as minimal as you say, then BRegs wouldn't be interested.
Of course, if you're making a nice job of the insulation, etc... and think that it will be fine, if and when you fancy making it a proper "habitable" space ( Studio etc) then think again. Especially in July 2008 , the Insulation + Fire + Everything else will be even more prohibitive than this year. Your work will not count toward a real conversion ( which will involve Leccy certs, floor, insulation, access etc etc etc
Nonetheless .... you probably already have the ceiling of the garage fire-lined? And you're not breaching that? It would also be good if the power to the garage was done properly and has the right Leccy/Regs certificate for the period constructed.
All this is a bit of a fuss -- but your proximity to neighhbours and the tendency for house insurers to wriggle out of any claim, means you have to consider a few issues.