They were fancied to do very well in that election - Clegg was young, spoke really well and outclassed everyone in pre-election debates[0]. However they didn't do quite as well as hoped - while they added about a million votes over the previous election, they ended up losing a few seats in total. However they ended up in a fairly powerful position, since neither of the two bigger parties - Labour and the Conservatives - had enough MPs to form a majority government. So whoever could form a coalition with Lib Dems could basically win.
They chose to enter a coalition with the Conservatives who then proceeded to lifted the cap on tuition fees and basically every university in England and Wales promptly hiked their fees to the maximum allowed. In response they didn't do much other than wring their hands and offer meek apologies. The party was quite understandably crucified at the next election, losing 49 of their 57 seats and they've been the fourth party - behind the Conservatives, Labour, and the Scottish National Party[1] - ever since.
[0] - This was a pretty low bar, though. For example one of the memorable parts of the first debate was that during his closing statement he namechecked the audience members (name, location and issue) who asked the candidates questions. The media liked this. Needless to say, all the candidates did the same in the second debate :D
[1] - They do pull more votes overall than the SNP, but due to how the UK system works they don't get as many parliamentary seats. Understandably they pushed for a proportional representation voting system which would help ... but that failed.