With all due regard to @Mustard 's well-argued defence of the dual universe theory, I frankly just don't like the idea of two sets of Ewings running around living two sets of lives. If we're going to borrow from science fiction concepts I'd rather say that time was reset when Pam woke up, meaning that everything we saw really happened when we saw it but that history was then written over after the fact (retconned, you might say). This would have the added advantage of eliminating such niggling discrepancies as the activities of the blonde woman in the car. We could simply say that in the new timeline they didn't happen. Initially only Pam retains any memory of the original events - possibly because she was the most traumatised by actually being there when it happened - dismissing it as a dream, but eventually even she forgets. This would explain other questions like why she doesn't recognise Wes Parmalee as Ben Stivers. Meanwhile on Knots Landing, the same would apply. It's often said that Bobby "stayed dead" on Knots Landing. That's a cute turn of phrase but it isn't really borne out by anything that's said or happens onscreen. There's never a line of dialogue that reaffirms it. They simply don't address the issue. It's just as easy to say that, again, everything we saw in season 6 really happened but as of season 7 Bobby is alive and no one has any memory of it having been otherwise and therefore no reason to remark on the fact.