The alternate reality explained by Aggie C.

I'm sorry if someone has already posted this theory or one similar, but it is one I thought of myself, although I don't see why someone else might not have come to the same conclusion earlier. If so, I apologize.

Anyway, I think what we are seeing in the Alternate Reality are the visions of what the Smoke Monster (I will not refer to him as MIB, because I believe the MIB we saw was just yet another human manifestation of the true Nemesis) offers to each person.

We haven't seen exactly WHAT Flocke/Unlocke/Nemesis offers to the people he has already spoken to, but it is obviously something that is close enough to their heart's desire to successfully recruit some of them. He offers them redemption, a common theme throughout the show.

We think we know what each character's desires are (Jack's is Kate, Sawyer's is Juliet and who knows, it might have been if the actress hadn't left the show), but we are wrong. The AR shows us what each person's heart's desire truly is, what their demons are .

The season premiere sets up the premise for each flash sideways, the Nemesis is saying: Look, the island is underwater, and see what I can give you if you help me destroy it:

Jack's deepest desires: resolution of his Daddy issues and overcoming his fear that he would BECOME his father. In the IR (Island Reality), he tells Hurley, "I'd make a terrible dad." His worse fear: that he will be the kind of father his own father was. Possibly why he pushed Aaron away emotionally. He feels already like he has been put on an irrevocable path of becoming another Christian Shepherd by his choice in careers, especially with his father's domineering presence.
What he's offered: to be an awesome Dad, one who makes a conscious effort to not repeat his father's mistakes. Redemption via his own son. Unlike his reality from the flash forwards, he doesn't drink! He is NOT his father. Demons, gone.

Kate's deepest desires: reunite Claire and Aaron, and that she is innocent. More importantly, CLAIRE believes she is innocent. At this point in the show, Flocke has not spoken to Kate, and I think it will happen later, and by that point, Claire will probably have openly blamed Kate for taking Aaron, something Kate already feels extremely guilty about already, manifested in the scene in the grocery store. The one person from whom she seeks forgiveness tells her "I believe you are innocent."
What she's offered: All her past sins, the murder of her father and the taking of Aaron, absolved. Demons, gone.

Sayid's deepest desires: Nadia is alive and happy. He may not have her (perhaps he feels deep inside he really isn't good enough for her and even in his heart, he just wants to be part of her life) but she is happy, and he uses his evil abilities to defend her and her family.
What he's offered: Be the pathway to Nadia's happiness (he set her up with his own brother) and her protector at the same time, even if he can't personally be with her. Plus a boring, but innocent, career. Demons, gone.

Ben's deepest desires: Redemption for letting Alex be killed. Redemption for killing his father.
What's he offered: A chance to be met with the same choice of power vs. Alex, and he chooses to sacrifice the former for the latter. A real relationship with his father, where is his father needs him, he is the caretaker and his father actually cares about his life. All his demons, gone.

Locke's deepest desires: he marries what's her name, and his father is coming to the wedding. Com'n! Besides being paralyzed (and maybe a part of him has come to terms with it), the love of his life NOT driven away, and is OK with his having no use of his legs (and other parts probably), AND he's and his dad have a good relationship? How can this not be the resolution of all his demons?

I think as we progress through Season 6, we see the Nemesis speaking to each character, and showing them how he can take away their demons. We are not shown at the time what these demons are, and what it means for each person, because we are being shown them via each flash sideway.

That's how the two "timelines" converge. AR is not really a timeline, but we will see ultimately that's what each person is shown and whether each person chooses to accept the offer or not. Sayid obviously has, Ben obviously not. I think Jack's vision will actually be offered to him at the end of the season as the Nemesis tries to recruit him.

I have to admit, there is one hole: how does Locke get this offer if he's already dead. Maybe he was shown this vision earlier. I'm not certain. But there is a reason his AR is relevant, despite his being dead, so he saw this vision at SOME point. Maybe when he was pushed to kill himself to be used as Nemesis' substitute.