Pretty much. It looks like Cyber Space, but in the real world. Things are always happening, and it's like memories of X and Zero, maybe even Sigma are manifesting themselves into the the Cyber Maze Core (AKA as the Zero Virus Stages.)
Example 1: The boss Rangda Bangda from the first X game makes a return in Mega Man X5 as the boss of the 2nd Zero Virus Stage. An incarnation of the Yellow Devil from the classic series also makes a appearance as the Black Devil which serves as the boss of the first Zero Virus Stage. In fact the first Zero Virus stage is full of instant death lasers much like Quick Man's stage from Mega Man 2.
Example 2: It also has Dr. Wily's symbol in the background of most boss fights in the Zero Virus Stage. A further example that showed that Zero was indeed created by Wily.
Did I also mention that it is home to one of the BEST fights in the entire series... well 2. Zero Virus Stage 3: You fight Zero as X or X as Zero. Depending on whether or not the Eurasia Colony was destroyed or not decides on if Zero was Awakened or not.
If he was awakened then the fight just seems symbolic. I mean it was kind of established in I think X4 that X and Zero will have to fight each other at some point. Mind you X5 was supposed to be the final game in the series, which would have made the fight against Zero (or X who I always play as in X5) or X (if you manage to have Zero survive and not be awakened by the Eurasia Colony) far more epic and dramatic (remember Zero was supposed to die in the game. After their fight against each other Sigma comes in, they both go in to fight Sigma after recovering, Zero is incredibly injured [lost the lower half of his body and an arm] while X was holding Zero's damaged body Sigma attacked them with a laser through both X and Zero's chest. X was rendered unconscious, and Zero losing the last of his energy fired a Z-Buster shot at the near dead Sigma. Destroying Sigma, and using the last of his own energy died which would have been a permanent death].)
I swear when Capcom made X6 the series was really starting to go downhill... despite me liking X6, and X8.
Either way here is a good video of X vs Zero:
It's basically a retelling of what happened during the ending moments of X5 before Sigma came in at the last second.
http://www.youtube.com/watch?v=McjxOBZrmoo&feature=player_detailpage


