The Man in Black has been referred to as a security system, if there were some sort of evil on Earth Jacob might want the MIB released upon the evil to kill it.
The first people to the island would have been ancients such as Indians and Vikings they would have rowed up in canoes. They would have been good people and they would have thrived on the island, the entire time possibly making preparations for more people to come ashore. Figuring that others may wash up as they had and would surely want to stay and when they got here we would have extra shelter and food for them. Even Greeks -- Trojans would have just sat back in a hammock and tried to grow fruit for wine. I suppose they would have their disputes, there would have been some bad people, but generally speaking all got along.
Then the Black Rock arrived, and the island saw a different type of person, one who would not bother to find out how much water there is, before deciding that there is not enough and choosing to murder rather than share. The Man in Black was furious and flew into rage, he looked into those people and saw they were evil, all except for Richard. Who was a murderer, so he doesn't count.
The Man in Black argued to Jacob that he ought to be released since men are now so evil, they should be killed by the planets security system. He wanted Jacob to activate him by releasing him from the island, then he could read peoples minds and kill them when they think or do something that he doesn't like.
Jacob of course balked and told the Man that he was wrong, people can still be generally good.
That is the basis for their dispute. The Island is the cork that holds the wine, which is the Man in Black, inside the bottle. Jacob, himself is the bottle.