After asking about how the Machines would breed humans, one of the answers raises a related issue in the Matrix universe.
People in the Matrix are going to have sex and have children. It's not clear (at least from what I remember) if those in the Matrix are in the first generation of their world, but at some point the people in the Matrix will have children (or they'll notice something is wrong and wonder why babies are no longer born).
After childbirth (within the Matrix) there's a new human in the Matrix. Is this a simulated human? Will another bred baby eventually be hooked up to the Matrix and live out the life of the non-real baby that was just born?
Where does the new baby come from in terms of the illusion of the Matrix and is it always matched with a real human who is in the Machines' power plant/human farm?