They are all hooked up to Virtual Reality machine and they paid to go a 'trip'. Oceanic Airlines advert clearly shows an island that looks like our Lost island.
Their motives - their lives were miserable on the outside.
The Others - are either other participants or part of the system (same goes for Rousseau).
The monster - perhaps is a security system but in a VR sense
We could see the whole point of the experience is to build the character of the participants and help them to get over major traumatic events suffered in their lives.
Theory by: Rico