If you want a long, almost scientific explanation about Terminator, go to
this site. You have to bother with a lot of speculation, but it works. The same site has things on Donnie Darko as well, FS, if you're interested.
In the meantime, my take on the ending of the movie was quite simple: Frank told Donnie the world would end in 28 days. Donnie lived through those 28 days and at the end ends up travelling back to the night the engine crashed in his room. Donnie stays in bed and dies. Time paradox. World ends. End of fucking gothic fanboy speculation.