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A quick summary: The Conservatives, formerly in a coalition with the Liberal Democrats, won a full majority. Their erstwhile partners were absolutely destroyed, winning a total of just eight seats. SNP won almost every seat in Scotland, making it the third-largest party by number of MPs.
The leaders of the Liberal Democrats, Labour, and UK Independence all resigned after their parties' poor showings. David Cameron remains Prime Minister.
This isn't at all the result the polls predicted. Pollsters had the Conservatives in the lead, but not winning a majority. No one expected the Liberal Democrats to do just as badly as they did. It seemed very plausible that a progressive coalition between Labour, Lib Dems, and the SNP would form the next government.
Nate Silver and the rest will have very interesting things to say about poll bias and herding over the next few days, but I'd like to discuss something else: Duverger's Law.
The UK has long been treated as a counterexample to the rule that first-past-the-post voting tends to produce two party systems. Despite being underrepresented in MPs per votes received, the Liberal Democrats have held their place as the third-largest party, swinging elections and occasionally a coalition government. But after yesterday, they hold less than 2% of the seats in Parliament.
At first glance, it seems that SNP has just replaced the Liberal Democrats as the nation's centrist party. However, the SNP won all of its seats in Scotland--it's a strictly regional party.
In the rest of Britain, the division between Conservatives and Labour is considerably sharper. The UK is suffering from the same polarization that all first-past-the-post electorates suffer from. Votes are cast tactically, to deny the least-favored viable party the win.
To illustrate this for Americans, let's say you have a simplified ballot with the Greens, Labour, Liberal Democrats, Conservatives, and UKIP. If you lean right, you might favor UKIP over the Conservatives, but fear Labour will squeak out a win if you vote for them. You vote Conservative.
On the other side, you might favor the Greens over Labour, but fear a Conservative win if you do. You vote Labour. Moderates face a similar choice--which of the two major parties seems like the worse choice?
(It's important to remember that in many constituencies, there's really only two serious contenders. The UK is often less a three party systems and more a patchwork of interlocking two-party systems. However, the same principle applies when voters start thinking on the national scale.)
The fate of the smaller parties isn't really clear at this time. Maybe they'll rebound in time for the next general election, and we'll see another coalition government in the 2020s. Maybe they'll reform into protest vote parties, forcing Conservatives and Labour to alter their platforms or lose seats. Maybe they'll attach themselves to major parties, shifting their center of balance.
The best hope for political diversity, however, is to abolish the first-past-the-post voting system. There's a lot of different ways to go about doing this (personally I favor Singe-Transferrable Vote, but the Alternative Vote would probably be easier to implement). Regardless, I encourage you to watch C.G.P. Grey's series on the subject. I've embedded the first video below.
