Watch the movie. It's one of the most awesome movies ever made (in many humble opinions), and it's tame as all hell. There is hardly any blood, and I don't even think there is an "F-bomb" dropped anywhere in the entire movie. This forum has miles more adult content than that movie.

And yes, the picture is of Agent Smith. He's the main antagonist of the movie. He was a program that was generated to help keep the human race in line, but he has, since, broken free of his obligations, and is now out to take over the "world", as its most powerful entity.

The picture is actually from Matrix: Revolutions, which is the third (and worst, unfortunately) movie in the series.