Character Analysis
The Man who is "The Man"
Agent Smith's last name is Smith. In fact, his only name is Smith. Besides having one of the most common names in the Western world, he's basically as devoid of personality as you can get. He has a very distinctly monotone way of speaking. He wears the classic suit and tie combo with shades and a pretty phenomenally average haircut.
Essentially, he isn't anyone (well, of course he isn't anyone, he's a program, but that's not the point). If the Matrix is "control," as Morpheus says, then the agents are the controllers. They are the "they," the "them," and Agent Smith is "The Man"—the Matrix, the system.
The Matrix is a very complex program and sometimes things go wrong or hackers like Morpheus and crew muck it up. The agents were created by machines to right those wrongs and keep the Matrix stable. And that's exactly what Smith does… through violence, of course.
The Program behind the Mask
So, then we have the question: if that's all there is to it, why are we still talking about Smith? We really like the way he calls Neo Mr. Anderson, but does his character go any deeper?
For most of the movie he is simply an antagonist, but then we get the scene with Smith and Brown and Jones trying to hack into Morpheus' mind. Smith, like any good antagonist on the brink of victory, begins to monologue. First he talks about the Matrix itself.
While we won't truly learn about its ancestry until the Architect in Reloaded, Smith talks about the first Matrix which tried and failed to simulate a perfect human world. While some people think machines lack the programing language to simulate a perfect world, Smith believes that it was rejected because:
SMITH: Human beings define their reality through misery and suffering.
And then it starts to get good. Smith orders the other agents to leave him (which they do reluctantly) and he gives Morpheus and us insight onto why he needs the codes to Zion's mainframe.
As viewers, we've assumed he was working on behalf of the machines. The machines want to destroy Zion and Smith is simply helping him; they are the ones that programmed him after all. But no, that's not the case. Smith is acting on his own behalf, trying to destroy Zion so that he wouldn't need to be in the Matrix anymore.
We really see the man behind the mask when he takes of his shades and sits down next to Morpheus, distraught by the stench of humans. We now see Smith not as an archetypal villain, an arm of the machines, but a program with a will of his own.
When the machines became conscious, they were no longer working for humans. And now that a program is conscious, he no longer works for machines. It's a crucial theme of the Matrix and you should be ready for it in the sequels.