Bear with me on this one. (I also posted this on the fuselage)
There has been a lot of speculation on what blowing up Jughead actually did, and up until today I believe Jughead merely sent our 1977 crew to 2007, but now in light of the finale I have a different opinion.
Jack: Where are we dad?
Christian: This is the place you all made together so that you could find one another.
Now this raises the question, how DID they make it? Was it one of those cheesy "the bonds of friendship created this supernatural realm" explanations? I doubt it, so here is my explanation, and it relates to the "Schrodinger's Cat" experiment.
If you are unfamiliar with Schrodinger's Cat watch this short enlightening video: http://www.youtube.com/watch?v=CrxqTtiWxs4
or look it up on wikipedia.
Basically Schrodinger's Cat was an experiment designed to show the absurdity of a way of thinking in physics which turns out to be true. The way of thinking that Schrodinger considered ridiculous was that physicists were suggesting (in a more famous example) That electrons can have a charge that makes them spin not only clockwise and counter clock wise but in a third way, a superposition of states where the electron spins both clock wise and counter clock wise. And in the case of Schrodinger's cat, he thought it was ridiculous because if you apply that concept to a Cat inside a box that may or may not be dead, with the box closed you cannot say the Cat is both alive and dead; rather, it is either alive or dead, but experiments have taken place that state that this sort of thing, this superposition of states really happens at the subatomic level.
Now apply this principle to Jughead and the Island. At the end of season 5 we are left with tremendous uncertainty; we think that there are only two possible scenarios..Jughead either canceled out the energy creating this new reality, or it did not work and everything remained the same. But in fact much like at the sub atomic level, there was a third scenario, the world of Lost was in a superposition of states; the bomb both worked and did not work. Was it a coincidence that in the premiere, they showed jughead exploding twice before each storyline? No it wasn't, so then what was the reasoning behind that?
The reasoning was to show that Jughead did two things; it didn't work and the regular time line ran its course, but it also worked and created this other supernatural world where our losties would meet up after death before moving on to their final destination. The island both sank and did not sink. Remember what happens if the light goes out/island is destroyed? everybody dies, and in the sideways, where the light is out and the island sinks everyone is dead!
note: The fact that ben was off the island in the flash sideways does not invalidate my theory, the creation of this other supernatural world creates something entirely different where history, the circumstances and characters were ALL jumbled up and switched around. Pierre Chang and Widmore were also off of the island which would make no sense if the bomb killed them all.