The co-creators of "Flight of the Conchords," Bret McKenzie, Jemaine Clement and James Bobin, posted on the band's web site the news that there will not be another flight for "The Conchords":
Bret, Jemaine and James (co-creator/director) said “we’ve noticed the less we say about the future of the show, the more people want to talk about it, so in an effort to reverse this trend we are today announcing that we won’t be returning for a 3rd season. We’re very proud of the two seasons we made and we like the way the show ended. We’d like to thank everyone who helped make the show and also everyone who watched it. While the characters Bret and Jemaine will no longer be around, the real Bret and Jemaine will continue to exist.
HBO had previously said it was game to bring the show back if the show's creators wanted to do another season. Exactly whether or not the show''s creators canceled themselves or whether HBO had a hand in it, I'm not sure. But either way, it won't be back.