Alright so... the Monday before "The Variable" aired in the US, I speculated that the variable mentioned in the title was none other than Desmond (or, more generally, anyone who the "whatever happened happened" rule doesn't apply to). However, in the episode, Faraday says that the variable is.....
Get ready for it...... Here comes..... "Us."
Faraday was under the belief that free-willed human beings were, in fact, the variable of this crazy equation, and that the choices they made would inevitably change the course of time. However, I'm going to make a bold statement here, and say something I never thought I would: Faraday's wrong.
Since the Losties entered DHARMA time, we've repeatedly seen that the choices they make don't change history, but instead write it. Look at what happened with young Ben; Jack thought that he had saved the kid the first time around, and thus refused to do it a second time. However, it was BECAUSE Jack refused to save Little Mister Linus that the boy ultimately became an Other-from-another-mother. Look to at Faraday's encounter with little Charlotte; he thought that talking with her would keep her away from the island, but instead, it actually planted a mental seed that we grow, even when she became an anthropologist.
I think that Daniel Faraday said was not the result of being nutso; I think he was hopeful. Wishful thinking is something that possibly kept him going, even if he was, forgive the pun, dead wrong.
I do think that Desmond is the real variable, and is the only one who can change the course of things. Remember Eloise's words: "For the first time in a very long time, I don't know what's going to happen next." And why? Because her son changed Desmond's time line, which collectively changes everything.