The Klingon War timeline is the original timeline. The Enterprise C disappears and history continues without interference to the war outcome. Then it appears in the future and is sent back, creating the history we all had been watching on TV.
That's how I'd think of it too, except it doesn't explain the visual shift at the beginning, nor Guinan's knowledge of the TNG history.
This episode reminds me of "Yesteryear" - good, but the time travel makes no sense whatsoever.