SPOILERS!!! Do not read if you're planning on watching the LOST finale.
Okay now that we've gotten that out of the way, let's discuss. I'll start out with my simple bare bones theory. Everyone died on the plane. That was one of my wife's biggest issues with Lost, he couldn't suspend her belief that everyone would have died in that wreck. She couldn't get over the fact that so many people survived. Makes sense, it was a hell of a crash.
So, everyone died and the story, the whole six seasons or whatever, is the process of Jack simply, letting go. In the first episode, or at least I think it's the first episode, when he's on the plane it goes through turbulence, (some people think this was the exact moment when Jack died) and I forget her name, but the black lady says to Jack something to the effect of "you can let go now". He was holding on to the armrests and I never though twice about it until this morning.
Through out the last few episodes he speaks to Locke (back in the real world/the US) about letting go and helping him walk again. Jack even says that if he can "fix" Locke, he would be at peace. The whole show was about Jack coming to terms, him becoming at peace. A lot of people think that ghosts are people who died and had something to finish before moving on, or becoming at peace. That explains Michael wandering the island, he still has something to finish. Linus staying outside of the church makes sense because he's not ready yet. How could he be, he let his daughter die, he definitely isn't at peace, although he tries and does some altruistic things throughout. Again, whether or not he "really" let his daughter live in the real world is irrelevant, the fact that he made that choice, real world or not, is a decision that has consequences. I hope that makes sense, it makes sense to me.
I guess it's sort of like letting someone drive home drunk or some equally idiotic dumb decision. Whether or not that person kills him or herself or someone else, you still made the decision and it doesn't matter that nothing happened, because you would have let it happen anyway. Hmm...maybe I make less sense now, let's move on.
Everything happened in a blink of an eye. Did Jack really know these people, who knows, it doesn't matter. He thought up a scenario which gave him meaning, purpose, and ultimately a test and a chance at redemption. At the time of his death he may not have felt "worthy" of salvation, or the next step, or heaven, whatever you want to call it. Through this fantasy scenario, he was able to prove himself or convince himself of his worthiness. This was his Matrix of sorts, he needed it to move on. Granted, it is entirely possible that it was also Someone's test. A trial to see if Jack was worthy, either way he passed it with flying colors. (An Occurrence at Owl Bridge is a story with some similarities, I won't ruin it if you want to read it. )
The final moments were perfect. Isn't that what everyone would want to see when they pass? A loved one helping you through the transition and everyone you cared about waiting there. This is your heaven so it really wouldn't matter who died when, I think Jack's father mentions that there is no time there, no now, it makes sense to me. Something else I just thought about, and frankly brought a tear to my eye, was when the dog lays down next to Jack.
My mom always told me about how it's always good to have a dog and how when you die supposedly a dog, your dog, will help you find your way to heaven. I can't find anything in regards to this on the net at the moment, but I don't think it's a christian belief or something in Mexican or Latino culture. I believe I've heard it elsewhere, I just can't find anything specific right now. Anyway, that was another sign that Jack was crossing over and the dog was there to help him cross.
So in summary, the simple theory is, Jack died, he needed to process it and he created this story to do so.
But that's just my opinion.
I loved the ending and the whole series, I like the fact that it was left open to interpretation, because really, who knows? We could be wrong about the ending, we could be wrong about our ending. Maybe there is a heaven, an afterlife, but then again, maybe we just go out like in the Sopranos.
FADE TO BLACK