» Tue Dec 06, 2011 1:35 pm
My take on Jyggalag is that he was totally delusional about being the sane part of the personality. Remember that the only source of the story about the other Princes inflicting madness on him is his own speech at the end of SI. He sounds sane when he gives it, but don't be taken in!
Sheogorath knew that every 1000 or so years, he'd go completely over-the-top nuts and start destroying his own realm (is that the way a sane Daedric prince acts?), so he did what to could to disarm himself before that happened again by handing the power over to the Oblivion PC (you). You defeat the madgod because you've succeeded in taking that power for yourself via the rebuilt staff, and Jyggy goes off to calm down. When he "sobers up" enough for the Sheogorath personality to take control again, you can bet Sheo will want the power back, and by Syrim's time, he probably has it, and is contently ruling the Shivering Isles again. But he's probably a bit saner this time round, as your time as substitute Madgod will have altered the realm, which is to say, Sheogorath himself. It doesn't really matter to the story if you gave back control voluntarily, or if Sheo just waited until you died of old age (or sooner). The more sane he's become, the more likely he just waited it out.
tl;dr - Jyggalag is back to being Sheogorath, who is happy in his own realm.