What's the purpose of the lightning rod that Desmond built?

So, there are two islands, at least.

In the last season, some of "The Others" appeared to live in huts on the same island as the Survivors. This season we see that there are other "Others" who live in nice bungalows on this smaller island. Why? Were the huts merely some setup to make it appear that "The Others" are somewhat "primitive?"

So the pretty lady is a fertility doctor. And the children from the plane were taken...but where are they? (Other than Walt, who supposedly left by boat with dad, Michael.) There are no children shown living amongst the adults on the smaller island.

Is this some Utopian experiment?

Every episode brings more questions. The next two episodes look very interesting...can't wait. Kind of glad Game 4 of the WS was postponed.