Ok, here is my own half-assed thoery. I am a huge fuckin fanboy of this show.

The Hanso foundation (the mega-billionaires behind the Dharma Initiative) w/ all their resources in the world were able to locate this kind of rift in time/space. This allows them to run their illegal human testing regarding genetic engineering and life expansion etc.... I would believe something w/ the uber powerful magnetism connected with the button would have something to do w/ the existence and opening/closing of said rift. Also the reason why the plane was brought in and crashed when the button last failed.

I believe that "the others" know a way in and out of this place thus telling Michael and Walt to follow an exact direction in degrees and minutes or w/e to get out of there.

There are still some holes to fill though as why they act like grungy mfers. But I believe this is to blend in with the new arrivals to see who would make good candidtaes for testing...(i.e walt/kate etc...) Also, how they got info on Jack and whatnot....

But anyways thats my ideas of what the fucks going on.