Basically, Athena reveals to Kratos that Zeus created Pandora's box to store all of the negative energy generated from the Titan/Olympian war to prevent a future cataclysm. Unbeknown to Zeus, Athena injected the box with a positive energy to counter-balance the bad, should it ever be opened (the good/bad power of the box actually jives with real world Greek mythology). She then had Hephaestus create Pandora, a "lock" in the embodiment of a girl to keep her secret power of the box from escaping.
When Kratos opened the box in GoW1, only a fraction of the box's power went into Kratos to help him kill Ares. However, at the same time, he ended up releasing the negative aspect of the box in the form of a plague of fear that infected the land, including Zeus. Upon seeing Kratos killing a god, Zeus grew paranoid, and embarked on a quest to destroy him.
Meanwhile, the agenda of the Titans is put into motion, when Gaia realizes that Kratos actually has a chance to kill Zeus, thus creating a power vacuum that the Titans can once again fill, and reign over the Earth. Gaia eventually reveals this to Kratos, but is killed along with most of the other Titans.
In GoW3, Pandora ends up "unlocking" the hidden positive power of the box and (I presume) transferring the power to Kratos while he is knocked unconscious after a battle with Zeus.
Kratos and Zeus duke it out again, and Kratos kills Zeus' physical form, releasing his ethereal form, which crushes Kratos to near-death. Kratos goes on an inner journey (which was exceptionally done in the game, I might add) and learns that he can only ultimately succeed when he forgives himself for what he has done to his family. He does so, and Pandora's spirit/essence/whatever leads him to the box's true positive power, which she says is Hope (which is what all people fight for when all else is lost).
Kratos snaps back into the real world with these new powers and proceeds to pwn Zeus, finally killing him.
With the power still within him, Athena indirectly reveals that she too has an agenda that seeks to fill the power vacuum left by Zeus as the soul god, and insists that Kratos give the power within him to her. After satisfying his revenge, making peace with himself, and seeing that Athena taking power will once again subject Mankind to rule under one imperfect force, Kratos drives the Blade of Olympus threw his own chest, releasing Hope to the world. Ironically, the ego/revenge-driven killing machine who normally did not care for anyone else, did the noble thing (which I thought was a nice touch). Athena departs in disappointment, still in her ethereal form and vanishes.
After the credits roll, there is a short scene that shows the spot where Kratos was lying, now vacant, with a trail of blood leading over a cliff. Interestingly, Kratos fell on top of a visage of a phoenix, implying that he was given new life. So the gamer is left to decide whether Kratos was reborn only to throw himself off of the cliff to his final death, or if he climbed down from Mount Olympus to live on.