While I think its easier to just think of it as purgatory, I considered something different too...
Observe this:
http://arxiv.org/html/physics/0107050
"The Relationship between the General Theory of Relativity and Quantum Theory: How they combine to form a Complete View of the Universe"
In particular this quote:
Where the General Theory of Relativity ends, Quantum Theory begins. Quantum theory tells us that particle B can reside in two places at once.
I think that jughead and the spatially distorting electromagnetic properties of the island allowed Oceanic Flight 815 to both crash and land safely at LA X.
A parallel universe came to exist as a direct consequence of events. While there now appeared to be two versions of each character, they were in fact connected -- you may have heard of the idea that you can spin a paired/entangled particle in one place ... and its counterpart -no matter how far apart- will exude the same behaviour...
http://en.wikipedia.org/wiki/Quantum_entanglement
...well what if the two Universes were linked in something of a similar way?
In
The Constant Eloise Hawking shows prescient knowledge of when a man with red sneakers is about to die. When Desmond quizzes her as to why she didn't prevent it, she states that the Universe has a way of course-correcting, and adjusting to account for errors. That death cannot be avoided.
In the context of the show at the time, that clearly tied in to Desmond's desire to save Charlie - which of course he ultimately couldn't. However, what if the same thing applies across this dimensional split - the alternate universes. By creating a parallel reality, the 815 survivors' alter-egos have escaped their pre-destined fates on the original timeline. And so Desmond, once warned of course correction by Eloise, becomes the instrument through which the Universe corrects itself. One by one, he allows each character to 'remember' their other life via
flashes before their eyes. While this allows each character a convenient reunion with the loves in their lives, and a chance to reflect on their individual pursuits, failings and successes in those lives -- ultimately -- it also serves as a mechanic by which each character realises they are not at all in the right place. I believe that the other survivors also realised the extent of Jack's sacrifice and wanted to pay their dues by being there for him as he comes to terms with his own end back on the core timeline.
In a way Desmond is both the Grim Reaper and a shepherd herding a flock of lost, wayward sheep.
Once this process of 'awakening' is complete and they are gathered as one, Christian Shepherd made corporeal invites them to rejoin the light of the Universe. The same light that is at the heart of everything: at the heart of man, at the heart of the island, at the heart of all times and dimensions. They are not in a "where", and it isn't a "when". The X dimension is course corrected - Jack has saved existence, died alone so that they can live together -- and together they depart to rejoin the cosmos. As Jacob once said to Ben, they always had a choice, but this much at least, was always destined. FATE.
