The backstory (told through flashbacks):
Mateo (Lluis Homar) and Lena (Penelope Cruz) have a torrid love affair after she stars in a film of his, a film financed by her boyfriend, Ernesto (Jose Luis Gomez). When Ernesto discovers the affair he pushes Lena down the stairs and breaks her leg. After a subsequent violent encounter Mateo and Lena escape to the coast without telling anyone, even Mateo's trusted agent, Judit (Blanca Portillo), where they have gone. Ernesto releases the film without them, and it receives brutal reviews -- which confuses Mateo, who is convinced that he had made a great movie. Driving back to the hotel a few days later, Mateo and Lena are in a terrible accident. Lena is killed and Mateo is permanently blinded. Judit helps him recuperate and spends the next fourteen years helping him get through his grief and adjust to living without his eyesight.
When Judit returns from America, she intuits that Mateo has told her son, Diego (Tamar Novas), the story of his love affair with Lena. A few days later, at Mateo's birthday dinner, she decides to tell them both the whole story of what happened leading up to that fateful night. She and the editor of Mateo's last film had been paid off by Ernesto to allow him to tamper with it after Lena and Mateo vanished. He chose all the worst cuts of the film, which is why it got such terrible reviews.* Judit went along with the plan because she was furious with Mateo for vanishing without telling her. Part of why she has stayed by Mateo's side all these years is her desperate need to atone for how she had betrayed him all those years ago. Mateo forgives her, saying that fourteen years is a long enough time to live with a guilty conscience.
Ernesto had wanted all of the footage from the film destroyed, but Judit stole it before it could be done. She gives it to Mateo, and he goes to work editing the film so it can be finished properly. Working on the film and setting it right seems to give Mateo closure about his relationship with Lena, who had been the star of the film.
Separately, Judit confesses to Diego that Mateo is his father, the result of a brief fling they'd had. Mateo does not know. It is implied that this is why she never liked Lena, and why she was so jealous when the two of them vanished together. When the film ends it seems that Diego has not told Mateo about what he learned, although the two of them have clearly developed a close relationship as a result of the time they spent together while Judit was gone.
*It is implied that Mateo had never found out about the alterations because he was unable to watch the film thanks to his grief over Lena's death.
Thanks Greg B!