»Smith's change of heart«

In matrix 1 where smith is feeling morpheus's head, he complains of the smell of the matrix and how he hates the matrix and needs the codes so zion can be destroyed and the war won so he can return to the source.

Then he is destroyed and exiled when neo jumps into him.

When he returns he is free from the system and tries to take over the matrix "This is my world, my world!" which he said he despises.

I'm wondering if his first defeat had triggered a change of heart for him.

Smith has eccepted his fate as an everlasting program.
only because he now has the power to take over...everything.
the fact that he will soon be king and commander of a world of hive-minded smiths makes it up to the smell of morpheus

Remember, that when he screams "my world, MY WORLD!" he's only doing so 'cause he knows he is the supreme master of the Matrix at that point and he wants Neo to stop interferring with his business.

Smith ultimately plans to destroy the Matrix. His purpose is to destroy, a purpose dictated by being the opposite of Neo, whos purpose is to save and preserve.

Smith: The purpose of life is to end...

Oracle: Very soon, he'll have the power to destroy this world...he won't stop 'till there's nothing left at all...