I don't think Zion is a real world. Zion is a second matrix, an Upper Matrix if you will. Here's my theory:
Thomas Anderson is an Anomaly of the Upper Matrix. The nature of his anomaly is that he can manifest himself in the Lower Mattrix, as Neo, and once there, he can wield enormous power. This anomaly has occurred 6 times, but has not yet succeeded in freeing humanity.
Agent Smith is an Anomaly of the Lower Matrix. The nature of his anomaly is that he has an overwhelming desire to leave the Lower Matrix. It is not clear if this anomaly has ever occurred before. By itself, this Lower Matrix Anomaly cannot succeed in its quest. However, the confluence of the Upper Matrix Anomaly (Neo) and the Lower Matrix Anomaly (Smith) succeed in creating a chain of events that pull Smith into the Upper Matrix. Once there, he may succeed in serving (as Gollum does in LOTR) as an element of the evil forces who unwittingly succeeds in freeing Humanity (by smashing the Upper Matrix in which Zion is manifested).
What lies beyond this Upper Matrix, in a mystery. Wheels within wheels.
I predict that Matrix III will end much like Logan's Run, Soylent Green and THX1138- once you break out of the dome, city limits etc... you find a pristine, abundant world that no one thought could exist.
Or maybe it will end just like the video game it is and have 20 levels with 100 more levels in the upcoming version.