Had last night's LOST episode been, say, the fourth or fifth episode of the season, I probably would've been a lot more fired up. Unfortunately, the baggage of "Oh man, it's the third-last episode ever and they're finally exploring the Man in Black's origin, so this will surely be AWESOME' was just too heavy for the episode to deliver. Now, this isn't to say it was a bad episode --- taken out of that end-of-series context, it was very entertaining. But still, for an episode that promised so much background on the central villain of the series, there are still a ton of loose ends to be wrapped up. Hopefully the Mother's line of "If I answer a question, it will just lead to more questions" wasn't just a pre-emptive STFU to viewers if some of the big questions aren't clarified.
But still, we did end up getting enough information that we can create a loose history of the Island. So, the Island is located over this immense energy source. Those with knowledge of modern technological measurements (a man of science, say) can recognize this source as a vast electromagnetic build-up. Those who lived thousands of years ago and didn't have access to science (let's call them, oh, men of faith) would perhaps interpret this energy source as 'the source of goodness in the world' or some such spiritual description. The threat that "if the light goes out here, it goes out everywhere" might just be a metaphor for the trouble that would ensue if someone took this power for themselves from the Island to the rest of the world. In any case, prolonged or direct exposure to this energy can turn a normal human into sort of a demi-god with superpowers, and more often than not, it also has the side effect of making said normal human a bit of a nutcase.
Whether the title of 'Island protector' is official or not, nevertheless those develop the demi-god powers take on this role in order to keep the energy from falling into the wrong hands. Obviously, if someone were to harness the power of a time-traveling, life-prolonging, disease-healing Island, you could control the world. (coughcoughCharlesWidmorecoughcough) The Island protector isn't on the job permanently, but they can pass the duty on to someone else that they judge to be pure/able/willing enough to take over the job as soon as they ascertain that this new protector won't try to take control of the Island for his or herself. These Island protectors have existed for countless centuries, maybe as long as humanity itself has existed.
The latest in this line of protectors was the Mother, a.k.a. Allison Janney's character that was never given an actual name, so we'll just stick with the maternal designation. (And, p.s. how weird was it to suddenly see Janney pop up on LOST?) Like probably many of the protectors over the years, she had a pretty dim view of humanity since she was trying so hard to keep the Island safe in the first place. But she's also pretty tired of her role and, catch-22 alert since she thinks all humans are scum, can't leave until she finds a good candidate to take her place. When a pregnant Claudia arrives on the Island with two uncorrupted twin babies, however, Mother jumps into action. Suddenly she has her candidates. We've heard about 'claiming' earlier in the series, so my guess is that Mother claimed Jacob and his unnamed brother and thus set up the rules that prevented them from killing each other. You'll note that this rule seems to extend through followers of Jacob too, which explains why Ben and Widmore apparently weren't allowed to kill each other directly since they were both leaders of the Others.
Mother has her eye on MIB to be the next Island protector, but after he goes to live with the human settlers, she turns to Jacob. She officially passes her role onto Jacob via that weird potion and then goes to the caves and gets herself stabbed in the back by the MIB. (Who stabbed her before she could speak, which were the instructions given to Sayid and Richard, respectively, by Dogen and the MIB when they were trying to get them to kill MIB and Jacob.) Mother seems pretty okay with this, thanking MIB before dying, since she's finally been released from her duty.
Jacob, pissed over his adopted mother's murder, beats the tar out of MIB and throws him directly into the source light. This in turns transforms the MIB into the Monster and thus sets up the conflict that we're seeing play out over the entire series. Now, I've already seen a theory that states the Monster is totally separate from the MIB and is merely usurping its form in the same way it usurps Locke's form, Christian's form, Yemi's form, etc. But if that was true, then this entire Jacob/MIB plotline has been pointless since the Monster would be a different entity with a different set of motives altogether. No, it's safe to assume that the Monster actually is the MIB's soul or whatnot, morphed into the smoke thanks to the direct exposure to the Island's power source. It took away whatever soul the MIB had and made him pure vengeance --- it may have been the first case of 'the sickness' overwhelming someone and making them more or less evil (like Danielle Rousseau's shipmates, or like how Sayid was all zombie for most of the season before apparently managing to overcome it to save his pals on the submarine.)
The episode basically just confirmed several theories that were floating around about Jacob and MIB's contest. Jacob has the powers of 'life' for lack of a better term, and MIB has the powers of death since he can pose as the dead if their bodies are on the Island. But whereas past Island protectors just had to protect others from finding and using the source power, Jacob now has the secondary task of keeping his brother from getting off the Island. This is partially why Jacob is so keen on proving his brother's point about humanity wrong, since it's a fail-safe that if the MIB ever escapes, he won't automatically go hog-wild and kill everyone. MIB can't leave, however, until Jacob and all of potential candidates are dead and there's nobody to stop him, though he can't kill them himself as an extension of the "you two can't hurt each other" rule that Mother set up. Note, as well, that Jacob is a lot more democratic about finding a successor than his Mother was. He has a few hundred candidates in mind that he's monitoring to make sure he picks the absolute right person, rather than just the first kid that washes up on the beach. Jacob is also big on making sure everyone has a choice about being a successor, rather than his Mother literally telling him that "he has no choice" but to take over her role. That Jacob, what a class act.
So this semi-game between Jacob and MIB has gone on for centuries now, as different civilizations have come and gone on the Island and built temples, statues, DHARMA stations, etc. and someone even finished the MIB's underground wheel project for him. I guess that's his escape route, not a plane or a submarine --- once Jacob and the candidates are dead, MIB will turn the wheel and pop up in the Tunisian desert. I'd guess that he got someone from the Island's history to give it a test run first, and that's how the knowledge of the escape route got passed down through the generations until Ben used it again.
Now, what does all of this have to do with the alternate reality, or everything else we've seen this season? Damned if I know. But let's hope we can get through the last 3.5 hours of LOST with a few more concrete answers rather than informed fill-in-the-blanks answers. Like, if it turns out that Jacob and MIB's game is as simple as Connect Four.