One thing is for sure. The police are going to be a bit more cautious over the next few days, to avoid a repeat of what happened with the Brazillian guy. The terrorists know this, so what better time to go out strapped with explosives?
Within the next week or two there's going to be some incident - whether this is suicide bombings or some other method is impossible to say. Security is pretty tight in London at the moment, however it's impossible to stop and search anyone with a large coat or any bag - therefore some will slip through.
They will never give up - tie down the security on the tube and bus network, and they will target somewhere else - Liverpool, Birmingham, Bristol or even a large town. If anything this will probably have more impact than another attack on London as those that never visit London and feel they are safe will start to feel the terror Londoners are now feeling.