Smith turning into the oracle: Since Smith did 'take over the oracle' it is reasonable to assume since the oracle is a program and not a human, that she would return to normal once Smith is defeated. all the humans that were took over by smith would all die (I believe) since thier minds were taken over by smith. Thats just a thoery of mine.
Light coming out of Neo's mouth: That was the machines way of killing smith. the only way they could do that is if they had power over a human that is attached to the matrix(Neo), and is under thier control, I like to think of it as the machines "short circuiting" Neo's mind once it had been lost to Smith and it setting off a chain reaction that wiped out all the Smiths...Whew!
Again, just another theory of mine.