Most good stories start with a fundamental list of ingredients: the initial situation, conflict, complication, climax, suspense, denouement, and conclusion. Great writers sometimes shake up the recipe and add some spice.
Initial Situation
Nothing is right with the world (or at least, with England).
At the start of Ivanhoe, pretty much everything sucks. Cedric has disinherited his son Ivanhoe for going off on the Crusades without Cedric's permission. Ivanhoe can't marry his beloved Rowena, Cedric's ward. Ivanhoe is still off at the Crusades, and no one knows what's happened to him. Heroic King Richard I is locked up somewhere in Austria, leaving the English throne to his horrible younger brother, Prince John. And power-mad Norman lords are bullying the Saxons. To sum up: times are tough.
Conflict
Norman Knight Templar Brian de Bois-Guilbert faces down the Disinherited Knight at the tournament at Ashby-de-la-Zouche.
At this point in the novel (Chapter 8), we know a couple of things: (a) Brian de Bois-Guilbert has dueled with Ivanhoe before, when they were both in Palestine during the Crusades; and (b) Bois-Guilbert hates all Saxons, and Ivanhoe most of all. Bois-Guilbert wants to teach that uppity Saxon a lesson, but he is the one who gets schooled at the tournament at Ashby. An anonymous knight who calls himself "the Disinherited" kicks Bois-Guilbert's butt in single combat. The Disinherited Knight's triumph pumps up the audience with pro-English patriotism. It also stokes Bois-Guilbert's personal shame and desire for revenge.
By the end of the tournament we find out that the Disinherited Knight is none other than Ivanhoe himself. He's back from the Crusades and ready to fight back against the bullying Normans who have been making England hell in King Richard's absence. Ivanhoe has been injured during the tournament, and a beautiful Jewish woman named Rebecca carries him off to help treat his injuries. She's taken a shine to him.
Complication
Following this showdown at the tournament is another, more general Norman/Saxon free-for-all at Reginald Front-de-Boeuf's castle at Torquilstone.
The fight between Ivanhoe and Bois-Guilbert expands to include many more players. First Norman knight Maurice De Bracy kidnaps Rowena and Cedric to try to convince Rowena to marry him. De Bracy brings his captives to the nearby castle of Torquilstone, where Normans Reginald Front-de-Boeuf and Bois-Guilbert are waiting.
Then the local English outlaws in the forest put together a fighting force to rescue Cedric and Rowena. They hate the Normans, so they're basically looking for a reason to attack Torquilstone. As the outlaws prepare to fight, they also draw someone else into the party: the Black Knight, another roving fighter in disguise who seems sympathetic to the English cause.
As the tensions between the Saxons and the Normans explode into an all-out battle, three bystanders are also pulled in: Rebecca, Isaac (Rebecca's father), and Ivanhoe. Rebecca and Isaac were bringing Ivanhoe's unconscious body through the forest when they met up with Cedric and Rowena. Since they have the worst luck in the world, that's also just when De Bracy comes by to kidnap Rowena. Isaac and Co. get caught up in the fight, so they're all at Torquilstone. Ivanhoe is too weak to fight or else he'd be right out there with the Saxons attempting to destroy Torquilstone.
Climax
The English win (at Torquilstone, anyway).
The English triumph over the nasty Normans! In Chapter 31, The outlaws totally overrun Torquilstone, which gets burned to the ground. They also rescue Cedric & Co, and the Black Knight and Robert Locksley (captain of the outlaws) have won everyone's admiration. Woo-hoo!
Except there are still some issues. Ivanhoe was too injured to stop Brian de Bois-Guilbert from carrying Rebecca off against her will. Ivanhoe still hasn't had that final rematch that Bois-Guilbert demanded from him at the tournament. And Prince John is still plotting in the background to take over the English throne. In fact, when he hears the news from De Bracy that King Richard I is back in England and going around in disguise as the Black Knight (surprise!), Prince John decides to organize a desperate assassination attempt on his brother. Even though the battle at Torquilstone is a great win for the Saxon/English side, there are still simmering tensions that need to be resolved.
Suspense
What's going to happen to Rebecca and King Richard?
We spend several chapters just waiting to see how all of the loose ends left in Ivanhoe are going to get tied up. Rebecca winds up in the custody of the bigoted leader of the Knights Templar, Lucas Beaumanoir. Beaumanoir thinks Bois-Guilbert's sudden attraction to Rebecca is proof that Rebecca is a witch who has put Bois-Guilbert under some kind of a spell. This leads him to condemn Rebecca to be burned at the stake. The only way she can be saved is if someone defeats Bois-Guilbert in combat at an appointed time. But Ivanhoe is still suffering from his tournament injury. What's going to happen to Rebecca?!
As for King Richard, the assassination attempt ordered by Prince John fails. In the process of rescuing King Richard, Robert Locksley admits that he is none other than the famous outlaw Robin Hood. And King Richard acknowledges that he is none other than the Black Knight. Now everyone's real identities are out in the open. Even so, Richard appears weirdly indecisive about taking his throne again. The fact of the matter is, he seems to be having much more fun hanging out with the outlaws in the forest than he would have actually being king. When is King Richard going to get his act together?
Denouement
The remaining loose ends get resolved: Rebecca's rescue, Cedric and Ivanhoe's relationship, and the tensions between the Normans and the Saxons.
At last, the moment we've all been waiting for: Cedric and Ivanhoe forgive each other, and Rebecca doesn't get burned at the stake. The first happens because the Black Knight meets up with Cedric, introduces himself as King Richard, and demands that Cedric forgive Ivanhoe. Cedric agrees, since he owes the King Richard his life. Cedric also agrees that Ivanhoe can marry Rowena. Just as this happy news is sinking in, Ivanhoe gets an urgent message from Isaac about Rebecca's imminent burning. He rides off to the rescue.
Ivanhoe arrives at Knights Templar headquarters just in time to challenge Bois-Guilbert in Rebecca's trial by combat. Ivanhoe is still injured, so he doesn't get in a very good strike at Bois-Guilbert. However, Bois-Guilbert is so conflicted between his duties to the Knights Templar and his love of Rebecca that he just keels over anyway. Bois-Guilbert's sudden death shocks everybody. Beaumanoir declares it's the will of God, taking Bois-Guilbert's death as proof that Rebecca is innocent of witchcraft. So Rebecca is saved, Ivanhoe's honor is satisfied, and all is well.
Conclusion
The Normans and the Saxons have made peace with each other and we get a happy ending for Ivanhoe and Rowena.
After Cedric decides to allow Ivanhoe to marry Rowena, he finally comes to terms with the fact that the Normans aren't going anywhere. He forgives his son for siding with King Richard and gives up on his dream of another Saxon king on the English throne. The best that can come out of this Saxon-vs.-Norman struggle is a new, mixed culture to which both the Saxons and the Normans contribute. (Which, in fact, is what comes about in real-life England.) Rowena and Ivanhoe marry and live happily with King Richard's support.
There are still two unresolved (or unresolvable) issues: first, Rebecca. Once Rowena and Ivanhoe marry, Rebecca decides she has to leave England for a less prejudiced place. (For more on the tragedy of this love triangle, check out "What's Up With the Ending?") Second, King Richard dies young and Prince John does become King John. There's no way around that historical reality, so the merry, romantic England Scott portrays in Ivanhoe must not last much beyond the end of the novel. Ivanhoe gives us a (mostly) happy ending, but at best it's a temporary one.