I think this will just turn out to be another round of sabre-rattling. I'd be very, very surprised if this escalated into actual conflict.
For starters the Argentinians can't risk being the subject of embargos from Europe and the US as a result of an illegal annexation, especially in a recession like this. They certainly don't want the memories of the Galtieri regime to be re-awakened in South America and the rest of the world.
Secondly, with Prince William on the islands it would be extremely risky to attack. It's one thing to attack a disputed territory miles from the home nation, it's another thing to kill the future head of state of a G8 nation. I wouldn't say the international condemnation is worth it.
Thirdly, I'm not convinced that Argentina even have the resources to mount a successful invasion. Figures vary on the size of the airforce's fighter and bomber squadrons, but I've seen anything from the mid thirties to the mid sixties quoted. Bearing in mind that many of these aircraft are actually veterans of the first Falklands conflict and were twenty years old even then. This story repeats itself throughout the rest of the military too. When you compare that with what Britain currently has in the area; four brand new Typhoons (one of the world's most advanced fighter/bombers), a Type 45 destroyer (the world's most advanced air defence ship) and potentially a nuclear submarine. It's too much of a military risk for Argentina, who would have to throw everything at the task to succeed.
This is a particularly damning report on that very subject:
http://www.thecuttingedgenews.com/index.php?article=11294&pageid=44&pagename=Slices