OK, so what happens if they fail to form a coalition?
Conservatives have won the election, really. But they didn't get the majority of seats. That means it's difficult to pass all the laws they would like to pass because each law needs over 50% of MP votes to pass it. With a majority, they could pass every single law they wanted to pass without a worry, as long as the party whips keep all their members in line, which shouldn't be too hard at the beginning of a new government. But in this case they don't have a majority. If they fail to form a coalition, Conservatives form a minority government and David Cameron is our new Prime Minister.
Lib Dems might support Conservatives in forming a minority government.
Anybody know how much the Cons are going to rise taxes by?
Con+LibDem would form a majority government. There'd be no point in a coalition that was still a minority. And what makes you think Conservatives are going to raise taxes? I haven't read their manifesto so I'm not 100% sure but I would assume they're going to cut taxes, especially the inheritance tax lol.