I am afraid I have to disagree with Null. For the first part of his answer, we are exactly on a same ship. in one of the first scenes of matrix reloaded me here this dialog
"You destroyed me, Mr. Anderson. After that, I understood the rules, I knew what I was supposed to do, but I didn't. I couldn't. I was compelled to stay, compelled to disobey. And now, here I stand because of you, Mr. Anderson. Because of you, I'm no longer an Agent of this system. Because of you, I've changed. I'm unplugged. A new man, so to speak. Like you, apparently, free."
based on this dialogue, it is obvious that agent smith wasn't free before his first serious encounter with Neo.
In a part of the movie (I couldn't find the transcript even with great effort), it is mentioned that free and powerful version of agent smith exists only because some codes related to Neo is copied to agent smith code after Neo defeated him at the end of the first movie.
Even The Oracle mentions in a dialog with Neo that Agent Smith's evolution is the answer of the system to the anomaly that is created by Neo; "the result of the equation trying to balance itself out." And the rise of Neo starts at the end of the first movie; it is the moment that his mind is really set free.
But for the second part I think he is using a wrong interpretation of the word 'reloaded'. In the famous dialog between The Architect and Neo, it is mentioned that each time they destroy the whole zion and whole samples (humans connected to the Matrix) and they choose if I remember correctly 5 men and 12 women from Zion to rebuild the Matrix. So it doesn't really mean that they can manipulate human memories.
Anyway in another dialog between Morpheus and Neo, Morpheus says to Neo that they can't let a freed mind go to it's previous state (connected to the Matrix). So from this dialog it may be concluded that this process is possible.
But would they really do that? Would they really accept such a risk? I don't think so.