For real numbers $x$ and $y$ we define $M(x, y)$ to be the maximum of the three numbers $xy$, $(x- 1)(y - 1)$, and $x + y - 2xy$. Determine the smallest possible value of $M(x, y)$ where $x$ and $y$ range over all real numbers satisfying $0 \le x, y \le 1$.
To determine the smallest possible value of \( M(x, y) \) where \( 0 \le x, y \le 1 \), we need to analyze the three expressions \( xy \), \( (x-1)(y-1) \), and \( x + y - 2xy \).

1. **Define the expressions:**
   \[
   f(x, y) = xy
   \]
   \[
   g(x, y) = (x-1)(y-1)
   \]
   \[
   h(x, y) = x + y - 2xy
   \]

2. **Analyze the range of each expression:**
   - For \( f(x, y) = xy \):
     \[
     0 \le xy \le 1
     \]
   - For \( g(x, y) = (x-1)(y-1) \):
     \[
     0 \le (x-1)(y-1) \le 1
     \]
     Since \( 0 \le x, y \le 1 \), \( (x-1) \) and \( (y-1) \) are non-positive, making \( (x-1)(y-1) \) non-negative.
   - For \( h(x, y) = x + y - 2xy \):
     \[
     0 \le x + y - 2xy \le 1
     \]
     This is because \( x + y - 2xy \) is a convex combination of \( x \) and \( y \).

3. **Find the minimum value of \( M(x, y) \):**
   We need to find the minimum value of the maximum of these three expressions. We will consider the critical points and boundaries of the interval \( [0, 1] \).

4. **Evaluate at the boundaries:**
   - At \( x = 0 \) or \( y = 0 \):
     \[
     M(0, y) = \max(0, -y + 1, y)
     \]
     \[
     M(x, 0) = \max(0, -x + 1, x)
     \]
     The maximum value in both cases is 1.

   - At \( x = 1 \) or \( y = 1 \):
     \[
     M(1, y) = \max(y, 0, 1 - y)
     \]
     \[
     M(x, 1) = \max(x, 0, 1 - x)
     \]
     The maximum value in both cases is 1.

5. **Evaluate at the critical points:**
   We need to solve for \( x \) and \( y \) such that \( f(x, y) = g(x, y) = h(x, y) \).

   - Set \( xy = (x-1)(y-1) \):
     \[
     xy = xy - x - y + 1
     \]
     \[
     0 = -x - y + 1
     \]
     \[
     x + y = 1
     \]

   - Set \( xy = x + y - 2xy \):
     \[
     xy = x + y - 2xy
     \]
     \[
     3xy = x + y
     \]
     \[
     xy = \frac{x + y}{3}
     \]

   - Set \( (x-1)(y-1) = x + y - 2xy \):
     \[
     xy - x - y + 1 = x + y - 2xy
     \]
     \[
     3xy = x + y + 1
     \]

6. **Solve the system of equations:**
   From \( x + y = 1 \) and \( xy = \frac{x + y}{3} \):
   \[
   xy = \frac{1}{3}
   \]

   Substitute \( y = 1 - x \) into \( xy = \frac{1}{3} \):
   \[
   x(1 - x) = \frac{1}{3}
   \]
   \[
   x - x^2 = \frac{1}{3}
   \]
   \[
   3x - 3x^2 = 1
   \]
   \[
   3x^2 - 3x + 1 = 0
   \]

   Solve the quadratic equation:
   \[
   x = \frac{3 \pm \sqrt{9 - 12}}{6} = \frac{3 \pm \sqrt{-3}}{6}
   \]
   Since the discriminant is negative, there are no real solutions.

7. **Conclusion:**
   Since there are no real solutions for the critical points, we conclude that the minimum value of \( M(x, y) \) is achieved at the boundaries, which is 1.

The final answer is \(\boxed{1}\)