After reading through Uncaged, I noticed a point of interest. In that book there are two rather large plots - one being the soul-gem trade, which rather directly relates to Darkwoods activities and Faction War. The other is the Will of the One trying to resurrect Aoskar. Now, we know Faction War wasn't supposed to be permanent. We know that, somehow, the dev team was going to bring the factions back to the Cage. It occurred to me - what if it's through this other storyline, involving the Will of the One? I wasn't quite sure how that could get the factions back in the Lady's favour, though. Perhaps the Will almost succeeds, and it's through the actions of multiple faction high-ups (maybe some that stayed 'unofficially' in Sigil) that they are thwarted? Anyone else have ideas on this?
The future of Sigil?
Agh are implying that the bladed one is the very embodiment of the multiverse or she is the will of the one 
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My theory derived from the Lady keeps Sigil Neutral thus keeping it in the position it currently holds and stopping it slipping towards any of the other planes. She booted out the factions, or at the very least disrupted them, as they were upsetting that balance.
The Lady just IS.
Greybeards have been arguing this for a millenia or more.
Her power isn't derived from the portals of Sigil, remember that stint after the Faction War where everyone was panicked that they couldn't use any portals? Yet Her Serenity opened 'em up again, didn't she?
I'm just content to say that Sigil IS and the Lady IS. No theory, just solid FACT.
There is no proof that the Lady exists. The senses might be deceived. Maybe there is no pattern to the flayings and mazings, and anything you think is the result of an action is coincidence.
Woah. How'd I come up with that? I think I'm going to have a barmy in the gatehouse use this line of logic in my campaign.
whoa anyway that whole keeping sigil neutral is a logical explanation but that mean if she ever disapeared that sigil would go crashing onto a plane of the magorities alignment :shock:
There's nothing saying in proof that She's neutral either, could just as well be chaotic, good, or Lovecraftian. If there's a possibility to that storyline it might be that Aoskar comes back into the picture at the behest or even in debt to many of the factions, w/The Lady turned out on her ear...er uh razor blade, or what have you. Unlikely? Definately, but possible
none-the-less.
There is no proof that the Lady exists. The senses might be deceived. Maybe there is no pattern to the flayings and mazings, and anything you think is the result of an action is coincidence.
Woah. How'd I come up with that? I think I'm going to have a barmy in the gatehouse use this line of logic in my campaign.
There should never be solid truth when Her Serenity is considered. Rumor and conjecture and doubt add to the over all tone of the setting, especially whe campaigning in the City of Doors.
Let us just assume that we THINK there is a Lady of Pain and that her motives are easily comprehended. That is enough... For the truth, if we can realise it, can be as simple or complex as you want or need it to be.
I'll think that the lady is just there to keep sigil sigil from going to hell (literaly or figutavily your choice) and leave it at that
That's where I leave it 
The Lady's there, and she's kinda cute.
Hmm.. Seems to have gotten dark all of a- *flayed*
Any power vacuum fills quite quickly, and perhaps it would have filled with things that even the Lady of Pain could not have predicted. If the banishment of the Factions leads to Sigil being overrun with fanatical priests, or the Blood War spills into the streets, or nefarious unnamed yugoloths (I think they start with 'S' and 'A')
suddenly got their hooks into all the power structures of Sigil, then the Lady would have second thoughts.
See, as long as the factions were in Sigil and effectively ran the place, it was their toy if they stayed within the bounds set by the Lady. They were out in the open, and they generally behaved by the rules. They squashed anybody else who tried to set themselves up as rulers and they ran a lot of the rackets in the place. With them gone, more powerful forces could take that over. Secretive groups could start to cause havoc in the City of Doors. Powers could start infiltrating left, right and center. Suddenly the Lady may find too many threats to handle and too much happening in the dark. It's a lot easier to control the factions by scaring their (mostly) human factols. In a way, the factions were her agents of control in Sigil. Without them she may find that the crude tools of flaying and mazing are not sufficient to run a burg of this complexity.
Finally, as a personal theory, I think that the Lady derives part of her power from all the planewalkers using her portals to travel to everywhere else in the multiverse. A chaotic Sigil which is shunned by planewalkers would greatly weaken her. She might even invite the factions back in to regain Sigil's status as the gateway to the universe.