[Argon]

Ok, heres my thoughts on this after further thinking. I think as solidus said this something like the 13th floor, ie. a Matrix within a Matrix. Now the Architect even said it "...this program has run 5 times and each time the sentinels destroyed it, in fact they are getting better at it....everytime you (neo) and I meet you pick the door to save Zion...." This statement alone proves that Zion is just another matrix inside the matrix, especially if it has been destroyed and rebuilt 5x prior. Now my feelings on the Matrix inside the Matrix is this: Zion and the sentinels are just another Matrix for the people of Zion like Morpheous, Neo, Trinity, etc... that got unplugged from the Matrix of the outer world, kinda of like a backup protection for Rogue programs like them.

According to the Movie, "Yes" Zion has been destoyed, infact in the last scene when they get on the only surviving ship, the captian tells them "...it wasn't any kind of defense it was a slaughter...(Referring to the sentinels tunneling into Zion and Zions effort to defend themselves)"

Now as far as the world that Zion existed in (i call this world the Zion Matrix), as soon as Neo decided on the door that could save Trininty, everything changed!! Infact Neo says it when they get back to the inner world he says "...somethings different...(Right before he blows up the sentinels".

Some other random thoughts, the Spoon that the kid gave him, did anyone think that was just outta place. Remember in the first Matrix the kid learns to bend the spoon, this is where Neo first starts to notice things are different and starts to learn about the Matrix. I think whats gonna happen in the third movie is Neo is gonna bend the spoon and this will be the big revelation, that they have the same powers in the Zion Matrix as they do in the Outer Matrix.

Whats Smith's Deal, he's obviously up to no good, theres gonna be a showdown between him and Neo in the next movie. No doubt about it.

Anyways thats my 2 cents.