The clock was counting down, Locke types in the numbers and the clock resets itself...
Any ideas what that's about?

3...2...1... Kaboom!

Let me expound on that a bit..

He's there to monitor something, to make sure something is going according to plan, let's say he dies, or gets abducted or something, it's a self-destruct mechanism to hide whatever's being done there.

You think the whole island blows?

Good thought!

He was probably sent there by some government organization, and I wager that the men in the boat who stol Walt were perhaps workers who were left to fend for themselves and not be able to leave so they couldn't leak any secrets. Desmond was probably told that he would be relieved of his post at a certain date and if he didn't keep resetting the timer the island would blow so as to keep the place a secret. I'm sure the sharks were created by the organization too to keep people from escaping. If they are robots or a super race of sharks then I'm positive they can destroy a boat.My two cents. I hope it made sense.

Either it's a self destructive mechanism like someone stated, or it is to let whoever is running this shin-dig know that he is still in the hatch and being a good boy and staying quarantined. He can't stray away for too long or too far at only 108 minutes.

Makes sense. But didn't the shark bleed when Michael shot him?

red fluid! Red fluid, I tell you! Could have been oil, gas, weird science super serum! Who knows??

Makes sense. But didn't the shark bleed when Michael shot him?

It may have been blood. But if it was mechanical, it may have been a type of fluid. My dad used to work on cars, and many fluids have a reddish color to them. I remember seeing a certain type of transmission fluid that was blood-red in color, so who knows. Or the shark could be cyborgish.

They clearly made a point of making us think it was blood...

So it probably wasn't.