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... I don't think everyone is in an "alternate" timeline (Jack's scar from the emergency appendectomy, anyone?). I think one of the last things that will happen in the show is that everyone gets to make a wish (I keep thinking about the slip of paper in Jack's hand when they get back to the island. I know it's what's left of Locke's letter to him, but the only words left are "I wish"). Their lives are put back in reality as they would have been had the plane not crashed, but there are obvious changes. And I think they all have to do with what each person wished, and who they asked (Jacob's camp vs. MIB's).
It's a bit like final judgment, I think. The scale that Dogen mentioned that weighs men's hearts? That's an ancient Egyptian belief (one of many Egyptian references) regarding the final judgment.
Why I think that? First and foremost, Flocke's comment to Sayid in "Sundown". Second, it's obvious there are differences in everyone's lives. Some people's lives changed for the better, some not really at all. Some for the worse. Examples...
Jacob's camp wishers:
Hurley - he's lucky. After his comment to Jacob when Jack smashed the mirrors in the lighthouse, it's obvious he still blames everything that's happened since the crash on his own bad luck. Now he's the luckiest man in the world.
Jack - once told Hurley that he'd make a terrible father. Now he gets the chance to find out, and discovers he's not as horrible as he thought he'd be.
Kate - still a fugitive, but gets a chance to help Claire and Aaron - something she's tried to do (and I'm guessing she'll fail) by coming back to the island.
Sawyer (?) - Don't really know what's up with him yet, but he seemed happy on the plane. He didn't really look like a man who'd just killed the wrong person by mistake...
Rose - Didn't wish the cancer away, but she doesn't seem the type to do that anymore. She's at peace with what is going to happen to her. Maybe she knows she'll see Bernard again after her death?
Dogen - he was with his son at his audition. After what we just learned about him, that should be explanation enough.
MIB's camp (people who don't seem to have gotten exactly what they would've wished for in typical deal-with-the-devil fashion):
Locke - Things seem to be going alright with Dad, but he's still in a wheelchair, and got fired from his job. He's not even going to try and get out of that wheelchair by going to see Jack. Accepted his miserable lot in life.
Claire - The couple who was going to adopt Aaron have split up, leaving her with only her kidnapper as a friend (a plot point which I really don't understand).
Sayid - Nadia is alive, but not his wife. He didn't get her after all.
Jinn - doesn't seem to be having the easiest time, now does he?
Unknown:
Lots of these! Sun, Ben, Richard, Charlie (though he's pretty miserable), and a host of other people who we just haven't seen yet, or whose situation we just don't know enough about!
I know this is a long and rather complicated theory, but what do you think?