OK this just popped into my head, it could be crazy, but here it goes.
What if Jacob's visits to the Losties were in a totally different timeline - as in, these visits never happened to the Losties who we have been watching for 5 seasons. Perhaps the bomb goes off, and they really do all die. Jacob, with his infinite power, goes back in time and instills in these messed up people great, powerful messages:
Kate - don't steal, "be good Katie"
Jin and Sun - don't take love for granted
Locke - assured Locke that everything was going to be alright, may or may not have given him healing powers (perhaps we find that he can walk directly after Jacob visits him instead of him having to wait for the Island to do it)
Hurley - see your curse as a blessing
Sawyer - don't be bitter about your parents, what's done is done (not a direct message but perhaps influenced?)
Jack - "just needed a little push" (the line referred to the candy bar literally but was really about Jack)
Yeah, this doesn't explain everyone's flashback (Sayid, Ilana, Juliet), but the people I listed above have all exhibited characteristics that oppose what Jacob had taught them throughout the series.
These messages could have been conveyed not only through words, but also through Jacob touching everyone. Perhaps he can transfer a little bit of his will and wisdom through his touch.
So, perhaps the sixth season will represent a second chance for these characters we know and love - except now, they have been profoundly changed by their visits from Jacob. They live their lives from that point on over again, and have a chance to re-make all the choices they made again, except this time, they make the "right(??)" choices.
Just a thought
Other random thoughts from re-watching the episode:
I noticed that the infirmary Ilana is being held at when Jacob visits her looks a lot like the one Locke is taken to in Tunisia right after he moves the Island. She seems like a leader, and leaders have been the only ones we know of to move the Island right now, so perhaps she was fresh from moving it. Don't know how this is relevant with the information we have now, but it's something to think about.
Both Jacob and his cabin burn at a very fast pace.
Juliet's flashback seemed out of place, namely because Jacob was absent from it. The flashback is about Juliet's parents telling her and her sister that even though two people still love each other, they may not be right for one another. This flashback could be one of two things: First, it could be an easy way to tie up the love triangle - Juliet does to Sawyer what her mother and father decided to do when she was a kid. Makes enough sense to me. However, the second option, is that the writers threw this in there to show that human beings in general are doomed to repeat the mistakes of generations before us, no matter how little sense they make. This mirrors the theory about the Island being a cyclical study of human ethics. "It only has to end once". Once free will is truly recognized, then we can start to make our own decisions, not influenced by our father's mistakes...
...and then Bam!, Jacob wins