In the conversation between Neo and the Architect, the Architect tells Neo that the "Prime Program" will be reinserted after Neo's code is disseminated.
Every time a Matrix inhabitant rejects some rule within the Matrix, it causes an error within the Matrix. This error (or the way of thinking that caused the error) is then encapsulated (or summed up) into the code of the One. We know summation doesn't happen on accident, so the summation process itself must be a program. I believe the Prime Program is this encapsulation (summation) process. It may be an invisible program, or it may even be the Oracle since the Oracle is wired to all Matrix inhabitants and would certainly be aware whenever a rejection occurs. I strongly believe the Oracle is indeed the Prime Program.
More generally, I think the Prime Program has always been the operating system of the Matrix. Before the Oracle introduced her choice model, the Prime Program would have been simpler - it wouldn't have had to worry about a system of rejection and the One. After the Oracle changed the Matrix, it expanded the function of the Prime Program. More support for this will be given on the next page, Matrix System: Revision History.
If the Oracle is the Prime Program, that would bring more meaning to the idea that Seraph protects "that which matters most." What in the Matrix matters more than its own operating system? Not only would the Oracle's death make it impossible for the One to cancel out rejection to avoid cataclysmic crash, the Oracle's death would crash the entire Matrix.
My theory also makes the Smith-Oracle takeover make more sense: not only could smith see far into the future, he was also literally running the entire Matrix. That is why Smith laughed like a lunatic. It is also why the Oracle was the only program in the Matrix that Smith took over which resulted in a whirlwind in the room. This surely resulted from the fact that there are so many links and connections from various system components to the Prime Program - the whirlwind represents a massive reconfiguration of the system's interface with the Prime Program.
When the fifth One started the sixth Zion (the Zion that we saw in the three Matrix movies), at some point this fifth One was killed in the Matrix, probably soon after Zion was finally established, as it doesn't help Machines to have an invincible redpill hacker wreaking havoc inside the Matrix any longer than absolutely necessary. Morpheus described this to Neo, not realizing the man who could "remake the Matrix" was really just Neo's predecessor. Since it takes 100 years for the Matrix to need resetting, this puts the Prime Program / Oracle in the position where rejection is taking place within the Matrix, but she has nowhere to "encapsulate" this rejection since the One isn't around yet.
This is where "Potentials" come into play: they are likely all jointly playing the role of the One until the One emerges. Presumably, each potential is given bits and pieces of what will finally all be given to the One when the time comes. Until this idea came to me, I always thought the name "potentials" was a bit weird. Now it makes perfect sense: these kids are all people who could "potentially" be the One as the Oracle searches for just the right person. In reality, she already knows who it will be and probably doesn't consider the young ones as serious candidates to be the One, but she still needs people with no regular contact with the outside world, no family, and nice young brains (i.e., orphans) that can easily normalize and accept even the strangest rejections of reality to fulfill this duty as a "placeholders" until the One comes along.
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