So I've finally been able to find an explanation that concisely describes exactly what http://www.gamefaqs.com/boards/615803-the-elder-scrolls-v-skyrim/61231075is, and I think I understand it now. To clarify though, basically one realizes that everything is the dream of the Godhead which is some kind of universal force in the world of the Elder Scrolls, and thus realizing they're a part of the dream and part of the Godhead they can manipulate reality, as Tiber Septim and Vivec did? And another thing, what is this I read about being erased from reality when you realize this?

Edit: I just realized I posted this in the Oblivion General Discussion. Could a mod be so kind as to move this to it's proper place in the Lore section?