Various media I've read makes the same claim that arresting Assange would violate the Vienna convention, including the linked article from GP. Seems like the main topic is this:

    Article 31. The host nation may not enter the consular premises, and must protect the premises from intrusion or damage. [0]

I don't really believe the UK is going to march into the embassy and take Assange; can you imagine the political fiasco that would arise? The letter was probably meant to add pressure to use as a negotiating tactic.

[0] http://en.wikipedia.org/wiki/Vienna_Convention_on_Consular_R...