Wow, I've read through this whole thread, and I'm shocked with how much speculation has been said about Agent Smith, no one has made the observation: Agent Smith is a virus.
It makes sense: Neo can manipulate the matrix to his will, which means manipulating code and data... The ripping off of the headset "tore out" a big chunk of Agent Smith's code: His ties to the Matrix, which essentially turned him into a rogue entity.
Also, keep in mind that the body-inhabiting didn't come out of nowhere. It's what agents do... He just doesn't have to leave the body (through what? He lacks the earpiece, which I think might serve as the agent-equivalent to the Telephones)...
What I can't quite figure out is why, given free will, Agent Smith still wants to kill Neo... Is that just remnants of previous programming, resentment for being brought into existance this way, or what?
In any case, Smith seems like he might be the key to bringing down the Matrix... Although the cost is, well, questionable. As a virus, he can basically take over and become the whole system... Whether or not mankind gets jettisoned in the process is anyone's guess (but hey, at least there's Zion, if indeed that is "real"...) In any case... Yeah, I'll go see the third one, just to get the system of confusion resolved.