Here’s my theory on the movie: Zion is not real, but it is not strictly a part of the Matrix, at least, not as controlled as the rest of the Matrix. Zion may represent a sort of “managed anomaly”. Neo represents an anomaly that will be used to the system’s benefit- a masterly rewrite if ever I saw one. Neo must make a choice- but since the machines write the parameters, it is a controlled choice- no matter what he does, the machines win, since the Matrix will either continue or simply be reloaded. Using humans as batteries makes sense in a cyberpunk post-apocalypse sort of way, so that I believe is straightforward. Shutting down the Matrix means only that those who are plugged in will be killed in the sense that they will no longer exist within the Matrix. Chances are their bodies will still be used for power, simply withut the expedient of making them believe otherwise.
Free will and fate are a huge point of this movie, but I can’t really see the brothers W going 1984 at the end of it all. I’m thinking they’ll go for the Akira ending. Several times in the film, it is mentioned that machines need humans as much as humans need machines. It is also frequently said the Neo is “still human”. Think about this in terms of the comments on evolution. Neo is the first One to choose to behave selfishly as opposed to altruistically- he saves Trinity rather than mankind. I believe that there are a few factions here: Zion represents solely human interests, the Architect and the Agents solely mechanical ones. The Exiles, rogue AI like the Keymaster, meld both. The Exiles are being hunted for deletion so the Matrix can reload- as rogues they have ceased to function as they were written, exercising free will. Old, non-functioning programs must be deleted before installing a new system. The Oracle must be a rogue, since she is in danger, leaving her apartment, hiding in the Matrix, employing a bodyguard. If she were still following orders, this would not be necessary. (The Architect and the Agents are doing what they’re supposed to- they’re in no danger.) I believe Neo exercises free will as the Architect cannot foresee or control. I believe Neo will finally end the war, but not in the way Morpheus believes. I see the brothers W going for a sort of man-machineinterface at the end, both parties evolving towards a more peaceable symbiotic relationship in which control by one party over the other is not possible since both are integral parts of the system. (Think about the discussion with the Counselor on the nature of control.) Neo will therefore choose to bring the Matrix and real world together in some sort of harmony, or he will create a new world in which humans and machines can live together. His abilties both within the Matrix and in Zion are examples of this new power. It’s the symbiosis of fate and free will. Neo is fated to have this power- it is his choice what he does with it. (A Christ analogy may be appropriate here.)
As for Smith, he is now a rogue AI. He and Neo somehow exchage dinformation, giving Neo greater insight into the Matrix and giving Smith the power of free will. I think the Merovingian is a true program- he is doing what he’s supposed to do by keeping the Keymaster prisoner. The Keymaster has gone rogue, and must be kept imprisoned so he can be deleted. Persephone may or may not be rogue. It seems she has gone this way, but it may be a ruse. Too early too tell.
So there’s my theory of a sort.