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I have already bellowed that p.t. knows nothing about his subject matter, but since this film seems to be one large symbol looking for something to symbolize, here's how I see it.
The little boy is a supernatural presence of some sort. I get this because he steals Officer Kurring's gun; then later, as Kurring and Donnie sit amid a parking lot full of dead frogs--all of which fell from the sky--Kurring's gun falls from the sky as well. If you missed this, go see the film again [on second thought, don't; I want it to fail miserably at the box office]. Anyway, if the boy steals the gun and it later falls from the sky as an epilogue to the frogstorm, the boy must reside in heaven somewhere. Maybe's he's God made flesh (who says the Second Coming of Christ has to look like Ted Nugent?).
As far as Donnie Smith goes, I think he was gay because p.t. anderson needed a token homosexual in the film. I am not anti-gay, but I feel that if you must write in a gay charcter, his homosexuality must serve some purpose to the plot. Ex: the gay couple in "American Dreamer" served as contrast to the dysfunctional families on the block (the gay couple was the only healthy relationship); also, Greg Kinnear in "As Good As It Gets" was established because Jack Nicholson's character had preconceived notions about gays which he was forced to overcome to evolve into a human being.
But Donnie Smith does not need to be gay. Unlike the two aforementioned examples, if you made Donnie straight--gave him a crush on a waitress instead of a bartender--the story would lose nothing (because it wasn't that rich to begin with). So Donnie's sexual preference was inserted as p.t. anderson's way of saying, "Looky here, my obligatory fag!" (recall the token gay in "Boogie Nights").
I am glad we've gotten past the two dimensional portrait of homosexuals in films (no longer are they squealers like in "Vanishing Point" or homicidal freaks as in "Diamonds Are Forever"). But now that we've finally begun to overcome some biases and realize that homosexuals are just people like anyone else, artsy-fartsy directors think their film isn't deep enough unless they write in a homosexual somewhere. This is almost as discriminatory as the early stereotypes--we have to call attention to our cinematic gays instead of just letting the characters be what they are.
But that's my venting for now.
PS: I don't know what the murder at the beginning meant, but notice how every non-white character--the woman in the apartment, the reporter interviewing Tom Cruise, Luis Guzman, etc.--was an abrasive personality? I smell a little racial bias there, p.t.
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