The Holy Grail
Ever drink your Sprite out of a solid gold goblet? Yeah, we haven't, either. We enjoy the simpler things in life: a good nap, changing autumn leaves, aluminum cans.
If you're Walter Donovan, though, odds are you've sipped out of a bejeweled cup or two. This guy views the world from a pedestal. To him, the Holy Grail is a prize to be won—and not just any prize, but the biggest, best-est prize in the world. So naturally it should belong to him.
It's not a prize he's going to bust his butt for, though; at least not directly. Donovan doesn't like to get his hands dirty. That's why he teams up with the Third Reich and tries to manipulate Henry and Indiana into doing all the dirty work for him. Donovan's rich, and he's arrogant—and that's why he thinks work is beneath him. That's also why he assumes that the Holy Grail is some gaudy goblet.
To Donovan, the Grail symbolizes power—and power, for him, means opulence, superficiality, and straight-up showing off. He couldn't be more wrong about the Holy Grail, of course, but, since he manipulates others into doing his work for him, he learns nothing on his quest to find it.
To that end, the Holy Grail also symbolizes this guy's ignorance. That's why he chooses "poorly." That's why he dies a gnarly death. That's why you kind of want to cheer when he bites it, too.
In Indiana's case, on the other hand, the Holy Grail symbolizes pureness of spirit. He's still that curtain-haired kid who recovered the Cross of Coronado on a scouting trip and outran some armed bandits, risking life and limb, just to make sure that precious artifact ended up where it belongs: in a museum for everyone to appreciate.
Indiana's not after the Holy Grail for fame, fortune, or immortality. At first, he's just after it to prevent Donovan from gobbling it up. After Donovan shoots Henry in the gut, though, Indiana pursues the Grail and puts his own life on the line to save his dad's. For him, the Cup of Christ represents self-sacrifice. Go figure.
Since Indiana chooses the correct cup in the Grail room, we also see that he has acquired wisdom. Unlike Donovan, Indiana learns and grows on his Grail quest—especially where his father's concerned. Working side by side to outwit Donovan, Elsa, and the Nazis, Indiana and Henry are forced to confront their family demons and have a Festivus-style airing of grievances along the way. In the end, after a lot of bickering, they're both better for it. Their journey to find the Holy Grail brings them together.
For Indiana, the Holy Grail represents his and Henry's past mistakes, too. It's a big ol' cup of hurt. That's why, at the end of the film, when Henry tells Indiana to let the Holy Grail go and take his hand, he isn't just talking about some dusty goblet. He's also encouraging his son to let their past problems go and move on.
…And not to fall to his death in a deep, dark crevasse. There's that, too.
But What Is the Grail?
In Arthurian legend, the Holy Grail is the cup Jesus used during the Last Supper, and it's also the cup Joseph of Arimathea used to catch Jesus' blood when Jesus was hanging on the Cross. In some of the earlier Arthurian romances, it might have a dish or a plate or a stone, but pretty soon, it came to mean the cup we see in this movie.
There are lots of medieval—and not-so-medieval—poems about knights who go questing for the Grail, in particular Perceval, Bors, and Galahad. One theme that comes up again and again in these poems is that only the purest knight can actually find the Grail, because he's the only one who is worthy of it. In the legends, that knight is usually Galahad.
Does any of this sound familiar? Many people searching for a fantastic artifact that can only be achieved by the one with the purest intentions? Yup: that's the plot of Indiana Jones and the Last Crusade. Indiana, like Galahad, is able to achieve the Grail precisely because he's the one with the purest intentions toward it. Everyone else—Donovan, Elsa—falls by the wayside.