How the Lib Dems might view hung parliament negotiations

I am indebted to Mark pack at Lib Dem Voice for this very interesting article based on a dicussion on the Liberal Democrat History Group meeting at their Party Annual Conference in 2009.

Thus far I have been trying to put a personal view, as an elector, on the current negotiations for forming a Government. This article describes the process from within a political party. Reading this article there are two clear points that are relevant to the current machinations. First, the political parties will have short and long-term political objectives. They will not just be looking at the policy details, but what the electoral impact might be in the future. Second, the Liberal Democrats are very likely to be well-prepared, probably much better than the other two parties. And it is very interesting that David Laws who is central to this article, is one of the Lib Dems negotiators.

The interesting question for me are:
1) Is opening disucssion with Labour a negotiating ploy to get more consessions from Cameron? Or do they really wnat to work with Labour?
2) At what point do the Lib Dems walk away? And what would be the consequences of such an action?