I watched the episode again last night. A couple more things came to me:
- I came to the same exact conclusion about Juliet as gmillerdrake. In fact, I had come here to post about it.

It fits. First, she cries "It didn't work". Then as she's dying she seems to go incoherent and act like she's just meeting Sawyer. Then after that when she "snaps back" to reality, her demeanor has changed and she's happier and tries to give Sawyer the message that it did work. I think her dying allowed her mind to drift between alternate realities. Or something like that.
- I know there's evidence against Jacob inhabiting Sayid. (smokey/mib only seems to take the shape of dead people not inhabit them and we all assume he and Jacob have the same powers.) But something is definitely up between the two of them. In the scene where Hurley is talking to Jacob, Jacob is standing over Sayid and he is concentrating or thinking and ignoring Hurley. Then he announces to Hurley that they have to get Sayid to the temple. Maybe Jacob was figuring out what to do? Or contemplating if he should go into Sayid's body or something? Or maybe there are other lower level players in the game (someone like Richard or the head of the temple people) and one of those is inhabiting Sayid?
- It really does seem like a game or test of humanity and morality. Both players not being able to directly order the pawns to do things... but being able to sway them and convince them into acting certain ways. (I find this thought interesting, since Dharma was also on the island to conduct the same types of socialogical experiments.)
- As Jacob is dying, he says "They're coming." Anyone have any thoughts on that?? Maybe Jacob and MiB are in some sort of prison/exile/purgatory and/or meant to keep each other in line. Now that one is gone the whole balance is thrown off and someone even more powerful is coming to end the experiment?
Like I said before... just throwing a bunch of stuff at the wall to see what sticks because its fun.