My theory starts from the arrival on the island of MIB and Jacob. They came probably on a ship in some ancient age. I believe they found the temple and some other stuff on the island and that maybe they arrive with other people. The place was considered "magic" for its healing properties and this people build statues and temples for something they cant understand even if it is scientific.
At this time Jacob and MIB are simply men, not smokey or monster or other stuff... The fact they are not aging could be due to the water of the temple or some "time-travel" properties that we don't know for the moment.
Assuming this, some event in the past (a sort of incident?) left Jacob and MIB alone on the island. They went to the lighthouse hoping that someone see the island and they discovered that the lighthouse reflects images of land... at the beginning they didn't understand, but then Jacob realizes that this are images of the future... people that in someway are connected to the island... He found also a way to leave the island and he used his previous knowledge of events to push these people toward the island. He believed that this is his duty and at the beginning he is helped by MIB.
We can imagine that in past centuries a similar story of Jack and co. maybe happened to other people. Jacob and MIB attracted them on the island. There was a series of action, maybe also involving time travel and "incidents" and then all of them died.
"They come. They fight. They destroy. They corrupt. It always ends the same."
All of these people are "candidates", but maybe candidate is not the right term. They haven't to be the substitute of Jacob, they have to accomplish some specific task on the island.
Looking back to the valenzetti equation they have maybe to change the constant of the equation and save the world. And these persons, these candidates ARE the constant. The interaction of Jacob make them variables, but nature replaces them with other people... and so on...
In this sense "Anything that happens before that is just progress"
The list of candidates decrease the number of possibilities.
And Jacob seemed to be convinced that there is a final solution, maybe with the last bunch of people, which are our Losties.
Before our Losties Jacob and MIB met the Dharma Iniziative. They interact with them and maybe one of them was caught and maybe studied. It will be surprising to them discover that they were so old and a sort of immortal. Maybe they involved one of them in a sort of experiment and that transform MIB in Smokey.
This could explain why the monster seems to be partially technological as we learnt from the sound it makes.
The new smokey became Cerberus, initially a security system of the DHARMA, then after "an" incident DHARMA discovered that Cerberus is out of control, able to change shape and so on... they find a way to constrain him but they have to build the sonar fence etc etc... But MIB take revenge of the DHARMA and kill'em all using young Ben Linus convincing him he is jacob (the purge).
Everytime Ben thinked to talk with Jacob he received answers from MIB.
Another possibilities is that US ARMY did something to MIB before DHARMA, transforming in smokey... we don't know why they have a bomb on the island and the reason they were there.
After some "incident" or just exploring some parts of the island smokey time travel in the past and that was the reason of the picture of smokey in front of Anubi in the temple...
At this point we have only few candidates and, in my picture, they are going to be killed, all of them. Smokey/MIB is not interested to leave the island, want to destroy the man that transform him in a monster and maybe the island itself.
But Jacob have still faith in a possible progress. In fact Hurley was needed to the island exactly because he talked with dead people. And in this way Jacob can still influence the island story even if he is dead.
The beginning of the end will be that everyone will die accomplishing some duty and then we will discover that the split of the timeline was a part of the plan... a part of the progress... and that we have not only one sideway but multiple sideways... and different past where they are not able to accomplish their duty on the island and without their sacrifices the sideway-worlds die.