Is the Source Code a simulation or a parallel universe?
The answer to this question is surprisingly simple (based on the physics of the movie) and it is this simplicity which makes it elegant. The source code is a computer program which creates a worm hole to plug any consciousness into other similar parallel universes it can locate based on its input data. This input data is the data from all the minds on the train (i.e. all the people who died) whose last 8 minutes of existence have been recaptured to locate the exact time, place and event that we want someones consciousness to be plugged into. Since there are an infinite number of parallel universes (according to recent scientific theory), the source code can theoretically plug any consciousness into an almost identical (parallel) universe to our own. This is exactly what is happening in the movie every time captain Colter Stevens is made to replay those last 8 minutes. Remember also, a single consciousness cannot exist simultaneously in more than one reality/universe and one universe cannot directly affect another. Obviously, the pod thing we see Colter Stevens in is just the projected (by Colter) computer interface used to communicate with the subject in one reality it could be a hammock on a beach if Colters consciousness wanted it!
Keeping this in mind, there are essentially only two realities in the movie; since all the realities in which Colter dies are lost we can ignore those and concentrate on what happens at the end. First, lets explain the death sequence. Since a single consciousness cannot exist in more than one universe and the source code provides a connection between universes, when Colter dies in one reality his consciousness will revert back to the other, regardless of which reality he dies in. Now at the end when Colter sends the email, speaks to his father and calls Dr Rutledges office, he is doing this in reality B (the 8 minute playback reality) so events will play out as would be predicted (same as reality A since they are essentially the same in terms of physics) i.e. Rutledge would receive some pizza, Goodwin will receive the email and Colters father is a happy man. In reality A the train has already exploded and a second terrorist attack is imminent as explained in the movie. One can essentially think of reality B as exactly the same as reality A with the only difference being that Sean Fentress consciousness has been replaced by Colter Stevens. This would explain why Colter still looks like Sean at the end of the movie, why he continues to live (hes in a different universe) and more importantly solve the so-called goof of the bomber.
As I said earlier, the minds of the dead people are essentially only used to locate the exact time, place and event that we want someones consciousness to be plugged into, since it is a parallel universe those people are real independent people as in any universe. Therefore the bomber, although he clearly didnt die in reality A (or he couldnt have been caught, preventing the second terrorist attack), he still exists as an independent entity in reality B therefore no need for his last 8 minutes as his plans, explosives and motives are the same in both universes. It is from the moment Colter evades the explosion that the two universes start to become more different and the timelines of each universe goes in their separate directions. Finally, killing Colter in reality A meant his consciousness is now stuck in reality B and he lives a normal life in that parallel universe as Sean fentress and the Colter Stevens of reality B is been used in the source code project, meaning that soon he will die too due to the source code program, and only one Colter will be left in reality B.
But this also means that the Colter who is in the source code of reality B, will spawn another reality C almost same as B, and C will produce D
According to Descartes, "I think, therefore I am.". So, it's clear that Colter is the only reality. All other notions of parallel reality are mere fiction. In reality, even if this were to exist, when Colter is killed by Goodwin, that would mean he ceases to exist ("I think, therefore I am."). With the eight minute rule in place, he will live an additional wight minutes in the alternate reality (until his real brain dies) and then the entire reality (reality B mentioned above) fades away. Hence, this movie is not brilliant in any aspect. Thank you.
Source Code (2011) - FAQ