No, no, no.
The masked being is actually Terra's twin brother, who becomes lost in the power of darkness.
You see, the masked one is in fact subverting the will of Old Xehanort to open Kingdom Hearts - Since his darkness forbids him from doing it himself. (He simply uses a false keyblade, and the power of said darkness)
Terra, who also was tempted with darkness, learned that the power of light and his friends are stronger then the powers of darkness.
Then, at the last second, Micky goes one on one with Terra's Brother that ends in the destruction of his keyblade, allowing Terra time to stop Xehanort from reaching Kingdom Hearts. He finds that the only way to stop him, is to end both of their lives in a large explosion. Aqua and the now comatose Ventus, manage to escape the blast. Mickey and Xehanort, survive as well, though Xehanort loses his memories from the incident. Everyone assumes that Xehanort has died. Seeing the lifeless body of his Old Master before him, Xehanort, the only word he can remember is "Xehanort".
Terra, who walked the path of the Twilight - Would then become Riku's eventual Day To Dawn Keyblade, as his soul lives on as the new weapon, and also being a sort of big brother to Riku.
Aqua becomes the Keyblade that Sora eventually uses, having been sort of a big sister to him.
Ven becomes the Keyblade that Kairi eventually uses, having been the gentle warrior soul that had protected her Pure Heart during the game.
Since they erase themselves from the world, the memories of them are erased as well. With their hearts now in Kingdom Hearts, only their souls - The Keyblades - remain. Their bodies, however, remain and yern for exsistance once again. So much so, they attempt to merge with other powerful nobodies to try and once again have as much meaning as they once did in the world.
Thus, Roxas, Xion, and Xemnas are the fused Nobodies of the original three's bodies - yerning for a purpose.
Terra's brother becomes the Xehanort we all know and love after being found alone and without memories. King Micky tries to deal with the truth, not fully understanding why he knows of the Keyblade - yet no longer has one.
There.
There's everything explained.
HYUCK HYUCK
If that was an attempt at humor, it wasn't really funny.