Doctor 8, to end the Time War, must use a 'Time Bomb' to wipe both the Time Lords and the Daleks from history, to save the universe itself from the ravages of their catastrophic transtime conflict. With history itself in danger, the Doctor opts for the only sure way to end the war and it's damages. Utilizing the Matrix and the Sash of Rassilon, the Doctor causes the neccessary tools to manifest.

There is a whole fanfic story here, with Faction Paradox being the secret motive force behind the Time War: giving the Daleks the edge in technology that they need to finally truly threaten the Time Lords. Their aim is to force the Time Lords to utterly erase the Daleks from history, thus violating their own sacred Laws of Time, and unwittingly embracing the Spirits of Paradox. (See Lawrence Miles' excellent Doctor Who novels).

The Doctor finally realizes who is behind it all, and that the only way to stop it all is to erase the Time Lords themselves (thus Faction Paradox, a renegade Time Lord voodoo cult, is never born, the Daleks never get time technology, or even evolve, and the War never happens... as such). The Doctor takes his TARDIS out of Time and Space (ala Logopolis-which is why he still exists, albeit somewhat paradoxically), and causes the Bomb to strategically wipe out the combatants.

Afterwards, stricken with grief and self-doubt about what he has done, the Doctor goes insane and forces himself to regenerate. Doctor 9 takes to the universe to set history on the proper courses, as he knows them. Thus, he appears throughout history, saving the world from threats he knows will come, but circumvents long before they materialize. This is the Doctor which is on the conspiracy theorist's website in the new series premiere episode, 'Rose'.

This is a shorthand of my personal bridge between the Classic and New series of Doctor Who.