I Saw a Bright White Light
I think this episode gave us a hint as to what Locke saw that he was describing to Eko. We have to make some inferences here, but Jacob sent MiB into the cave with the bright light in it. When he went in the light went out and the smoke monster came out.
One reasonable inference is that the MiB somehow absorbed the light into himself. How that made the smoke monster, I don't know. Perhaps his hate and anger manifested physically. I think that's an answer yet to come. But MiB and the smoke monster was definitely connected to that bright light. So perhaps that means there is an essence of that light inside the smoke monster/MiB, and that is what Locke saw.
We don't know all that their mother knew, but she certainly knew a little more than she told us. She told MiB and Jacob that "I made it so you two can't hurt each other." Certainly that must be why MiB/smokey couldn't kill Jacob directly. He had to find someone else who would do it for him.
Adam & Eve and The Stones
It's interesting seeing the origin of the "Adam and Eve" skeletons, MiB and his mother, and the stones from that game MiB and Jacob was playing.
I had a Mother Who Was Crazy
Yeah, she certainly had a few screws loose, and Jacob chose to stick with her. On the one hand, he seemed to remain good and have a good outlook on people and life. Granted, he made his brother into the smoke monster, obviously not knowing quite what would happen when he did that, but it was in a fit of rage because his brother just killed his mother. Not that that makes it excusable, but he was young; he may have learned a few things since then.
But my point now was that he chose to stick with his crazy mother. His "mother" who killed his real mother so that she could keep him apart from his people and stay good. Perhaps this is the origin of the Others kidnapping the children to keep them good, and making lists of who were good and bad. It leaves me wondering what about Jacob comes from his advanced knowledge from being around so long and whatever he knows that we don't... and what about Jacob comes from the craziness of his mother?
Frozen Donkey Wheel
This was an interesting reveal. MiB was part of the well builders, the people who built (or started building) the donkey wheel. Well, it wasn't frozen here, but he mentioned something about bringing together water and the light as a way of getting him out of there. We know this would have "moved" the island and deposited him, probably, in Tunisia. Either he, or people that later came that he directed, must have redug the well and made the frozen donkey wheel. We'll notice that the well didn't look the same as it did when Locke went down it during his flashes through time, so he must have gone down sometime after it was destroyed and rebuilt.
What Destroyed The Village?
We assume it was the mother, but the village looked like a bomb hit it. Well, certainly a fire, but everyone was killed and everything in the village burned. Some kind of fire monster? The same goes for how the well was filled in. Which brings us to what the mother said to MiB and Jacob's mother.
"Every question you ask will just lead to another and there will be no end." Heh, well, that's an ample description of Lost if I've ever heard one. Even an episode like this that gave us a good look into Jacob and MiB's history leaves us with many more questions.