The island is “home” to extra-dimensional entities who have the ability to manipulate Fate and “Coincidence.”

Some recent, tantalizing clues:

• The four-toed statue
• The man who recruits Juliet and possibly engineers the accident that kills her ex-husband.
• (most notably) The “shop owner” who convinces Desmond that he should not try to change his Path

The fact that “The Others” always seem to know a great deal about the Losties -
and [more importantly] the fact that coincidence is such a major theme of the show.

I posit that the four-toed statue is an indication that the island was once the home of an ancient race of four-toed entities who perhaps gained the ability to exist outside of time and space - and thus the ability to travel within time - and thereby manipulate fate and coincidence.

The best evidence for this notion is the “recruiter” and the “shop owner,” both of whom convey an otherworldly presence and seem to be aware of fate and even able to control it.

You could rebut that Episode 8 (Flashes Before Your Eyes) could have happened entirely within Desmond’s mind, but I disagree — you can peruse my reasons by checking out my posts in reference to that episode by visiting the Lost Forum.

After seeing Enter 77 and hearing EyePatchMan’s story (though that certainly could be constructed of fabrications and red herrings), I have further developed this theory to explain The Others and The Dharma Initiative (and here I enter much deeper speculation).

I think The Others are the human agents of these Entities who have been recruited by them or ended up on the island by “chance” and The Others may even be somewhat in the role of worshipers of the Entities. Of course, a definite hierarchy exists among The Others, so only those close to the “top” may know the True Nature of their masters and have such devotion to them.

I believe what EyePatchMan said, that The Others were on the island before The Dharma Initiative — they may have been there for a long time in some form or another, and could even be half-breed descendants of the FateEntities.
On a bit of a digression, I think the reason The Others have apparent directives to kidnap children (and especially anyone born on the island) is that children would be less “polluted” by the thought constructs of the outside world (like Carl, they wouldn’t know what the Brady Bunch is — God knows I wish I could sometimes say the same) and more amenable to Indoctrination (unlike those pesky Losties with all their hangups and bad karma).

I think the Dharma Initiative are essentially what they claim to be — a group of Super Scientists with a Secret Society political twist who are on the cutting edge of reality, perhaps pushing into the Entities “territory” — I think they discovered the island and its unusual properties (such as the magnetic anomaly which the Hatch sat upon) and realized it would be the perfect place for their Secret Research — until they realized they weren’t alone, until they met The Hostiles.

It will be interesting to see how all these threads play out assuming that LOST will run for five seasons, we are right at the halfway point — we’ve already been shown quite a bit in the last five episodes — I think from this point forward, the story should become more and more fascinating.

For one thing, there’s still that mysterious Sickness to contend with…

not to mention what effect Walt may have overall.