Oh wow. That might have been one of the greatest 2 hours of TV watching that I've ever experienced. THEORY TIME!
***MASSIVE SPOILERS AHEAD***DO NOT READ UNLESS YOU'VE SEEN EP 1 & 2***
Ok, when Juliet hit the bomb, 2 things happened; First, it created a rift in the space/time continuum. The explosion in the energy pocket of the island killed everyone (in the 1970s) and sunk the island. Everyone on Oceanic airlines in the future (2000s) fly successfully across the sunken island, and land at LAX. They still have some form of deja vu, as they see each other on the plane and do a double take. Also, their lives are slightly different from having altered the past; Hurley is very lucky now (since the island numbers no longer have a hidden meaning), Locke GOES on the walkabout in Australia, and Charlie attempts to kill himself, somehow knowing that he shouldn't exist in this new timeline. If you were confused about Desmond showing up (he was never on the original plane), remember he had the ability to jump though time, similar to Faraday.
The second thing that happened after the bomb/time rift is that the survivors on the island DID NOT die, the island transported them to current time (2000s), but exactly how they were before, and still on the island. The normal time was SPLIT, and now there are 2 versions of "current time". The bomb had never actually gone off in the 1970s, and everything was just as it was before all the time jumping in last season. Juliet is still half-dead in the shaft (now the swan), and the survivors are now in the same time/space as everyone at the beach (by the statues foot).
WHEW!
Moving on, John Locke obviously isn't John Locke. Remember "The Dark Man" or "The Man in Black" shown last season with Jacob on the beach? They were watching The Black Pearl pirate ship sail towards the island, and discussed how The Dark Man wished he could kill Jacob. But apparently there were "rules" preventing this. The Dark Man said "one day I'll find a loophole" to which Jacob replied "and when you do, I'll be right here".
When John and Ben came into the foot statue to meet Jacob, Jacob said to John "looks like you found your loophole". John is The Dark Man, not possessing John's body, but just taking his form. Later, John disappears and the Smoke Monster appears to kill 4 attackers. As soon as Smokey goes away, John appears to utter "sorry you had to see my like that" WOW! The Dark Man = Smokey. His natural form might be the smoke, and he can take the form of any dead body that exists on the island. Maybe that's what we saw when Jack saw his dead father on the island? Or when we saw Claire? But if this is true, then Jacob can do the same thing (or something similar).
So, Sayid was shot and dying, and Locke (The Dark Man) made Ben kill Jacob. Jacob fell into the fire and turned to ash (ash is also what is used to keep Smokey away... could the ash be from Jacobs other bodies?). Jacob appears to Hurley in a spirit/ghost form and tells him to take Sayid to the temple. The temple people are surprised that the water is not "clear". My guess here is, the water has been clear for years, because Jacob was alive in the body we've always seen him in. Now that he's dead, the water is dirty (just like how Smokey is black air... Jacob's soul must exist in water instead of air). So they put Sayid into the water face down (so the water can get into him), and at the end he wakes from the dead asking "what happened?". I believe Jacob is now inside Sayid's dead body. That would make sense in difference of powers, Smokey steals the form of the dead, whereas Jacob gives new life.
Ok, that's enough for now, I need to go re-watch it again
AHHH I LOVE THIS SHOW