Here's my take on the story: the island is a giant metaphor for how people deal with the issues in their life - how they cope with their "baggage"

first what we know and then what my interpretation is...
"What we know"

• Ben's dad joined the Darma initiative which seemed to be a 70s peace, love and brotherhood group that thought that left the world behind so they could create a Utopia
  
• Unfortunately their island paradise comes under attack from a mysterious group of people ("hostiles") who inhabit the island - one of whom seems to be Ben's mom...
  
• They create a barrier to all of this and everything seems great (for the Darma group) until Ben crosses the barrier and into the forest and starts up a dialogue with the hostiles...
  
• Ben leads the hostiles in a take over bid and becomes the new leader of the group. Some more people from the mainland are brought in to the community.
  
• Ben says there's a "box" on the island that can make things/people known to the inhabitants appear - we've seen Jack's dad, Kate's horse, Hurley's imaginary(?) friend, Ben's mom....
  
• Finally there is also a dude named Jacob in a shack out in the woods and he seems to be incredibly powerful and mysterious
  

My interpretation

We have our hippies who decide that if we just "got away from it all" (all of the external negatives) we would all get along and live in paradise....unfortunately everyone in this initiative has internal "issues" arising from events in their past they aren't dealing with: people who hurt them, people who betrayed them, things they did.

The island then acts a metaphor for their minds/souls/internal state - their issues are constantly conjured up and "attack them" (stop them from living the ideal life they want). Thus, the 'hostiles" are all people that were conjured up by the initiative members.

To maintain their paradise they set up barriers (suppress the bad memories, not deal with them).

Ben's bad memory is his mother's loss - but instead of blocking her out he seeks her out and delves into the "forest" of his subconscious. However, once there, he doesn't deal with the issues (forgive, forget?) but indulges all of the negative emotions, goes mad, and becomes a sociopath (which leads him to kill his father and the Darma group). He then lives contentedly with all of these negative thoughts and his own anger - becoming someone who wallows in his misery and the dark side of his personality (rather than someone who denies the darker side of themselves like the Darma members).

Jacob is some even deeper form of the human subconscious - inhabiting a dark place in the inner reaches of a person's mind. He is made visible as the "monster" (he animates the ash trail Locke steps over (when he and Ben go to see him) and makes it become the smoke). Jacob stalks the island and judges and kills people (as in Echo's case). Everyone is afraid of him except for Locke.

I think Jacob is the moral compass that exists in our minds - he makes you face the things you've done (the images in the smoke). Locke is one of the few individuals in the castaway group (Jack is one of the others) who has led a moral life - we've seen he can't kill his own father despite what has happened to him and he seems to be always decent in the flashbacks...this is why he can face the monster without fear - the producers describe him as a 'man of faith'.

If my theory is right, it is interesting that the monster doesn't plague Ben - who is the least moral of anyone on the island. It does seem that Ben can't speak to Jacob (he's completely lost contact with his moral compass) and is furious that Locke can.

Any thoughts?