So, my friend is pretty adamant that the MIB 'unleashed' the Smoke Monster and that smokey then took the form of MIB (similar to how he has now taken the form of Locke). I took it the other way, that he went into the Magic Yellow Light, and Mr. Manhattan style was transfigured into the smoke monster. And that he was separated from his physical body.

Then Jacob took the body to the cave. Some flashbacks played so that Jacob remembered that he had to lay the bodies in a particular way... Why did he do that? So it would match season 1, of course! He almost forgot to make them hold hands... but then another clip played reminding him how to place them just so...

A few people at my Lost/Lunch group at work are convinced that this proves the show writers knew what they were doing with the "Adam & Eve" skeletons since season 1. In my mind, it proves they never had any idea and they picked something that 60% fits.