The following comment was made by my friend in Christ Mark [AKA Bluecollar] on the previous post. I think it captures the essence of sanctification by grace rather than a legalistic works sanctification that seems to be so pervasive in the American church today:
The fulfillment of the New Covenant is God the Holy Spirit living inside and moving us to walk in God's ways. Where man failed under the Old Covenant God takes up with the "I wills" of the New Covenant. Christians, both Jews and Gentiles, benefit from God's "I wills". Man failed under the Old, God triumphs in the New. I believe that the Church is now at the very appex of redemptive history this side of the eternal state.
The New Covenant is being experienced in an inaugural sense right now as men and women are now temples of God, indwelt by His Spirit, and walking (albeit faultingly) in His ways. He is now working in them both to will and to do for His good pleasure. His Spirit, working in concert with His word, is bearing fruit in lives. New desires arise from that heart of flesh spoken of in the New Cov. Christ-likeness is now the aim of the Christian life, thanks to the indwelling Holy Spirit.
That contrite heart God desires is now a reality. We are now to show forth the praises of Him Who has called us out of darkness and into His marvelous light. We are now His workmanship, created in Christ Jesus unto good works. The drive to be more like Christ is the product of the Spirit's indwelling.
Living lives to the glory of Christ is what brings on the rewards. In short, we are saved to serve, the Father having crucified us with His Son, that our bodies of sin might be destroyed. We are no longer slaves of sin, but slaves to God, and led by His Spirit. Having been conveyed by the Father into His Son's kingdom, the Son now reigns over us His subjects by the indwelling Holy Spirit. We all will go on to rewards, some having yielded 100 fold, some 60, some 30 - yet ALL will be rewarded. It will be grace upon grace - God having been the One to have enabled, to have led and to have energized the saint all along; and that saint getting the rewards for what God had done through him or her.