Bobby Dagen (Sean Patrick Flannery) lied about surviving a Jigsaw game. A flashback shows him being confronted by real Jigsaw (Tobin Bell) at a signing of his book. He is kidnapped and placed in one of the routine sequel games (identical to the format of ones played in Games 3, 4, and 6) involving people close to him. The games involve, in order, Bobby's publicist, lawyer, best friend, and wife. The last game involves Bobby's fictitious trial of having to hoist himself up by hooks through his pectoral muscles (a virtually impossible game to survive). None of them survive. Bobby is left to live with the lies he told.
Hoffman manages to break into the police station Hannibal Lecter style (he hides in a bodybag pretending to be a corpse). Hoffman kills all the police at the station, and finally kills Jill Tuck (Jigsaw's widow) with the face-trap.
Hoffman promised earlier that if he got Jill, the games would end. He returns to his lair to destroy it. As Hoffman leaves the burning garage, he is jumped by three real survivors. They are led by Dr. Lawrence Gordon (from Game 1). Gordon has been Jigsaw's secret accoplice all along. He surgically prepared several victims for Jigsaw's games, and was given an envelope from Jill in an earlier installment. It contained something I'm told is referred to as a Veeyaychess (it's some video recording device used in the dark ages). The tape is Jigsaw's request that Gordon "take care of things" in the event that "something happens to Jill." Dr. Gordon takes Hoffman to the bathroom where Gordon's severed foot still lies. Hoffman is left chained to the same pipe by the same ankle. The lights go off. The doors close. The games are officially over.