first of al when the kidd falls, as hes falling he then realized that life isnt what it seems to be, this is because of the near death experience, the same thing happened to the running dude. in theory when a person has a certain mind set they can free themselves if theyre so determined to do so. this story is based on the kid in reloaded, remember him when he comes up to neo and asks if he can be apart of the crew on the nebb.
and then he says thanks to neo for saving him. then of course neo says 'you saved yourself kid' which is exactly what he says to the kid at the end of the animatrix short. i beleive he could possible return to the matrix as a certain someone else.
his mind isn't dead, even though his Matrix body died...its like this, the mind, when jacked in, seems to have its own mind, ni the, Neos matrix mind gets seperated from his matrix body, even though his matrix body still acts like his mind, because it is his mind. perhaps, although the mind-body of Michael is dead, he can create a new mind-body, since it is just a digital representation...