There are three possible scenarios. One, current PM Brown could try to negotiate a coalition guvmint with the libdems. Brown still remains interim PM for now anyway, so he could attempt to offer a guvmint for the next couple of months. Problem is, even if Brown and Clegg agree to a marriage, their pact would still lack the required full majority in Parliament, so it wouldn't last long. Besides, the first indications point at a Brown resignation, because he'd hardly garner any significant credit of trust and he'd be under huge public and media pressure to relinquish power. Question is, would that be enough, or he'd keep trying to make coalition negotiations with the libdems.
Two, Cameron, the leader of the winning party, could try to form a minority guvmint with the lack of an absolute majority. He could try to gain support from some MPs from the smaller parties, which would be hard. He already poured a cold shower at the initial speculations that he'd rule together with the libdems (although the info coming on this issue has still been controversial). Btw, notice how the tiny libdems are now the most significant factor? Bear in mind that a minority guvmint would suffer from chronic instability and would hardly survive a whole term.
Scenario number three is calling new elections. This scenario would be the top subject after May 25, when the Parliament is supposed to vote the new cabinet, regardless of who's in there. If the coalition negotiations fail, or if Parliament doesn't approve the compromise guvmint, most probably the Britons would have to vote AGAIN. Presently this third scenario looks least likely of all. Firstly because it'd send a dreadful signal to the markets, and secondly because Labour could decide that their position would be much stronger if they're in opposition to a weak guvmint, as opposed to being a leader in a weak guvmint themselves. So it'll soon be time for making petty calculations which have little to do with the people's will. The people have already voted, and they haven't clearly made up their mind as it seems, so it's now time for the big fish to try to make the best of it, if possible.
One of the least obvious things at the moment is that, either way, the next UK guvmint would hardly last very long - regardless of whether it's coalition or minority guvmint. It'll rule in a situation of uncertainty, too many compromises and little will for consensus on the tough issues which the British politics stands at: urgently cutting the budget expense, painful but necessary tax increase, a slippery public sector reform.
Maybe that's the root explanation for this weird choice of the British people. Although during the whole election campaign (which by the way, amazingly to most Americans, lasts only for ONE month in UK), all candidates were doing great effort to avoid mentioning a word about the painful and unpopular decisions which the next guvmint would have to make from day one. But the voters are not that dumb; they realized that there's tough times coming ahead, regardless of whether Cameron or Brown would be at the steering wheel. So they kinda chose the third version: 'a hung parliament', a weak guvmint, political instability. Because that's the only scenario in which economic difficulties and unpopular reforms are looking inevitable.