While it is all but certain that Labour will lose the 24 seats, there are serious questions about whether the Tories can win 116 seats. For the Conservatives to win enough seats there will have to be a swing of 6.9% of the vote away from Labour and towards the Conservatives. The current polling appears to indicate a swing of less then what is needed and the Conservatives being 21 seats of the absolute majority needed.
If there is a hung parliament then the party with the largest number of seats can try to form a majority or the various parties can try to form a coalition government. Gordon Brown might have the advantage in this because as the sitting prime minister he, almost by default, will get the first crack at forming a government. The most likely possibility is that Labour will try to form a coalition with the Liberal Democrats and whatever 3rd parties can be brought into the coalition. If Brown can't form a coalition then the Conservative will probably form some type of government.
The most recent election to produce a hung parliament is 1974. Ted Heath's Conservative's lost on election day but Heath held on through the weekend trying to form a coalition before finally resigning in favor of Harold Wilson's Labour party. Peter Hennesssy tells a great story in his book The Prime Minister. During the weekend while the 1974 elections were in doubt, the cabinet secretary and the Queen's private secretary walked around St. James Park discussing all the options.
As an observer, and a person with no stake in the results, I want a hung parliament because I want to see what happens and how a hung parliament will resolve itself. Strictly as an interested observer, I am pulling for a close election and a hung parliament.