There is no Pac-10 championship game perse, but before the BCS system was established, the team with the best record in the Pac-10 played the Big 10 champion in the Rose Bowl, where the Big 10 team gets defeated.
I'm sure the BCS will fix the system again where a team cannot advance unless it wins its own division.
However, the BCS system will ultimately never work unless there is a playoff series, like in all the other college sports.