I've heard a few theories--VR game, purgatory, etc.--that all basically boil down to "They woke up and discovered it was all a dream."
Now, I doubt whatever resolution this show reaches is going to be satisfactory to everyone, but in my book if they go the "dream" route or any of its variants, I am going to be really, really pissed off.
I will be interested to see how they catch all the balls they have in the air. I doubt we'll be able to guess it in advance--hope we won't, anyway.
I'll probably get flamed for this as I'm not a die-hard Lost theorist or anything, but just going on what I watch and my personal beliefs of what is happening on the show. I realize that there will be holes on these thoughts, etc. from those who break down every second of every show, but overall what I think is happening is this...I'm going under the assumption that all of these people are already dead and the island is pergutory.
Pergutory by my meaning is the place that one goes when they die that is neither Heaven or Hell. They haven't done enough good to go to Heaven and haven't done enough bad to go to Hell.
That is why new characters continue to be introduced......more people are dying at a later date than the time the plane crashed and now ending up in pergutory (the island). All of the people that were already on the island before the plane crash died earlier than the plane crash victims and are still in pergutory.
The island is a place for these people that have not yet been determined "Heaven worthy" to carry out whatever it is they need to accomplish to hopefully be deemed worthy to move onto heaven. The island (pergutory) eventually brings out the true characters which is why we are now seeing each character starting to turn to the "bad side" (which when they eventually die on the show will move onto hell) or "good side" (which when they eventually die on the show will move onto heaven)
This is why children are so valuable on the island and stay there longer and grow into adults on the island....they haven't had a long enough "living life" to prove themselves one way or the other. The island is a place for them to carry out whatever personality they would've had when they were alive to prove if their soul is "good" or "evil" and eventually move onto heaven or hell.
This thought was also made clearer to me when you guys broke down the heiroglyphic symbols on the clock last night as basically meaning "Death"
I have a feeling that if they let the clock go fully to zero it could possibly mean that everyone that is presently in "pergutory" (meaning everyone presently on the island) would have their time expired to prove themselves that they are "heaven worthy". Thus, letting the time expire would seal everyone on the island's fate to Hell. But, by keeping the clock going, means it gives them all more time to prove that they are worthy of eventually moving onto heaven.