The Chamber of Enlightenment is the home of ancient souls. It is the spirit-world of ancient souls.
It is a chamber that was once part of an ancient civilization that predates the current Underground Realm of the Gnomes. It houses a crystalline device capable of showing images through crystal pyramid structures. It was guarded by the Dragon Wyrm that had taken it over, and had infested it for centuries before Connor destroyed it.
The chamber is the spirit-world of ancient souls in the Crystal Mystics belief systems. The spirit-world of ancient souls is the afterlife for souls of the ancient Crystal Mystics. A spirit of the ancient Crystal Mystics race that once inhabited Underground Realm of the Gnomes mentions that he could finally move on to rest there after the Dragon Wyrm was defeated, which was apparently preventing his spirit from moving on.
Behind the scenesEdit
It is possible that the old man had given a rather poetic description for the Dimension of Death, and that the Chamber of Enlightment is yet another way to the dimension. The Dimension like the ancient Crystal Mystics are very much tied into the history and role of the Mask. Alternatively it may be one of the realms which the spirits go to after being judged in the Dimension.
On the other hand, based on the comments in the game it would seem that Crystal Mystics found a way to 'ascend' beyond death through enlightenment. Thus they found a way to exist on within the Chamber of Enlightment via the Light of Life. Some could reappear to the living to pass on messages. Others left their memories in recordings, these became prophecies.
The crystals are also capable of absorbing evil energy as well, thus dark cloud that had corrupted the dark pyramid recording the spirit of Uriel and Lucreto.