The black smoke monster is probably one of the shows biggest mysteries but we will most likely find out what it is at the end of next season. Producers call it "Cerberus" after the 3-headed watchdog of greek mythology and most likely thats exactly its purpose on the show: to "judge" intruders and protect its surroundings (the island itself).
Its also most likely the single source of the ghosts we see on island, it seems to take the shape of humans and animals that have past on (I.e Christian, Yemi,ect) to directly connect with a particular person who identifies with that form.
The Monster; also known as the Smoke Monster by some of the characters; Cerberus by the DHARMA Initiative; the nickname "Smokey" by fans; or, according to Ben, as an entity for which the Others have no name; is one of the central mysteries on Lost. It was introduced as an unseen threat that dwelled on the Island in "Pilot, Part 1", and it has been encountered by the survivors many times since, sometimes attacking people and at other times sparing them. Its appearance is that of a freely-moving cloud of black smoke that can split into several smaller clouds. It produces a variety of loud noises, is capable of uprooting trees and foliage, and occasionally produces brief flashes of bright light which project images from a person's past. It can also take alternative forms, including human, through which it can communicate verbally with the people it encounters. Its origin and true nature are still unknown, but its primary role seems to be that of a judge of sin, as Ben has sought it out to receive judgment for his actions, and Eko was killed by it for refusing to repent for his past wrongs. It is also presumed to be a guardian of sorts, as Danielle and Robert have referred to it as the Island's "security system," and Ben has demonstrated the ability to summon it in order to protect against threats to the Island. Its connection to both the Temple and an ancient stone doorway suggest that the Monster has existed since the time of the Island's earliest inhabitants, if not longer.
honestly no one knows,YET. but what I've noticed, it only comes when someone has FEAR. When ever the "black smoke" comes who ever it "bothers"(surrounds/closer*i guess?*)they shake and act REALLY scared and I think the black smoke can scence that there scared or not.
Thats maybe why when Ben went with Jon Lock to the egyptian cave*thing* when the black smoke came it didnt kill him. but no one knows yet for sure. But were all excited to find out!