First things first.
If you have not seen the last of The Matrix, stop reading now. I mean it.
NOW.
Ok.

asato ma sad gamaya
tamaso ma jyotir gamaya
mrtyor mamrtam gamaya
From delusion lead me to truth
From darkness lead me to light
From death lead me to immortality.
I was impressed to all hell. I laughed, I cried, I felt my soul lift up and want to cry out with the rightness of what I saw. I was laying odds on one of three endings for the movie: The Hamlet Ending, The Happily Ever After Ending, and The World Sucks/Hopeless Ending. One way or another, I thought it was going to suck, because it wouldn't include everything that it was needing to include. Yet somehow, somehow, they did it right.
vidyam cavidyam ca yas
tad vedobhayam saha
avidyaya mrtyum tirtva
vidyayamrtam asnute
He who knows both knowledge and action,
with action overcomes death
and with knowledge reaches immortality
There is one truth in the universe, more unquestionable and undenyable than anything else: each side of the equation will equal the other. From the interactions of great spiral galaxies, to the most fundamental of quantum interactions, there will always be ballance - one side will counter the other, to the perfection of the two halves. They spoke in terms of variables, of action and reaction, and there is much truth in this. This is the ultamate truth - ballance of the whole.
On the one half of the equation, we have Neo, the far end of the human bell curve, the outlier among the outliers who were the previous One's - the guardian and preserver of humanity. On the other, there is the program known as Smith - the outlier in the world of the AI, the program gone viral - the very embodyment of what he hates so much - the virus of humanity. There was only one way it could end - the only way it could possibly end. The halves of the equation cancled each other out, and the world was remade.

yasmin dyauh prthivi cantariksam otam
manah saha pranais ca sarvaih tam
evaikam janatha atmanam anya vacah
vimuncatha amrtasya esah setuh
In him are woven the sky and the earth
and all the regions of the air, and in him
rest the mind and all the powers of life.
Know him as the ONE and leave aside all
other words. He is the bridge of immortality.
The Matrix is a self correcting system - in ways its own creators never imagined. The One was created as a purge and dump system for rebooting the Matrix and cleaning the system of anomalies. Neo represented the extream of this: it was though his actions that the Matrix repaired the one fatal flaw that it had. Those who wanted freedom, who could not accept an artifical world, would escape, and fight against what they saw as enslavement. And there was war.
Now there is peace - those who wish to leave may leave - those who wish to stay will stay - and the machines will no longer hunt humanity. Neither side wins - that's what peace is.
indriyebhyah param mano
manasah sattvam uttamam
sattvad adhi mahan atma
mahato vyaktam uttamam
Beyond the senses is the mind,
and beyond the mind is reason, its essence.
Beyond reason is the Spirit in man,
and beyond this is the Spirit of the Universe,
the evolver of all.
I have to take a moment and point out my favorite moment of the whole movie. As Trinity and Neo breach the defenses of the machine city, they leap over the defence line, vaulting the ship over the cloud banks which forever block out the sun. Watch Trinity as they break the clouds, and remember something: this is the first time she has ever seen the sun, the real sun, before. If there is nothing else worth fighting for, not love, not hate, not yourself, not others, not life, not death, not freedom, not security, not perfection, not choice, there is always the Sun. For tens of thousands of years, Man has worshiped it - since we have had sense to look up and wonder, we have worshiped this most reliable of things, this most permanent of things. Life giving, life taking, sunlight. If you fight for nothing else, let it be so your children may run and play freely in the sunlight.
yada pancavatisthante
jnanani manasa saha
buddhis ca na vicestate
tam ahuh paramam gatim
An odd moments notice - the bouncer called Seraph "Wingless" as a deragetory nick name. A wingless angel. Seraph.
When the five senses and the mind are still,
and reason itself rests in silence,
then begins the Path supreme.
And for those of you who think it was wrong for Neo and or Trinity to die - remember, without one, the other could not exist as a whole. They were part of each other, two halves of the whole, unable to be without the other. He made her wish come true once, and I think, I think, he made her second wish come true as well. There were tears running down my face when she said "Kiss me" and all I can hope for is that she died happy, knowing that Neo would be with her soon. She served her purpose for him, and would wait for him in what ever there is beyond the flesh.
bhidyate hrdayagranthis
chidyante sarvasamsayah
ksiyante casya karmani
tasmin drste paravare
And when he is seen in his immanence and transcendence,
then the ties that have bound the heart are unloosened,
the doubts of the mind vanish,
and the law of Karma works no more.
With Trinity gone, there was nothing left for Neo to loose. Thus, and only Thus, could he fight Smith as an equal. "Neodammerung" Neo's Dawn - the battle music of the Fight. But they were still not equals, and that is why Neo won, for he had something Smith did not, even with the incorporation of the Oracle. Neo knew why. Smith did not know why. And for that reason alone, he fought with deparation, to fill that void of understanding. Neo knew why - because he chose to.