I have a feeling some kind of a compromise will come soon. The Chinese are definitely pressing the issue on the Indians. The Chinese ambassador's statement, though stating nothing new, was worded in a very definitive way. Recently the Chinese Academy of Social Sciences (a major Chinese policy thinktank) has also been calling for the return of Arunachal's Tawang to Tibet.
Any compromise leading to loss of territory for the Indians would probably not be acceptable for most Indians. Most Chinese though probably don't know where Arunachal even is on the map.
The Chicoms can press the issue all they want, there wont be any compromise from India.