Spoilers: Sure, but mostly only through s4.
Well, how can you tell which is which? I mean, they both look kind of stick-figurey to me. 
Oz and Xander are a study in contrasts and relationality.
Signifier and signified, green eggs and ham, chords major and minor, dork and loner, talkative and meditative, hyena and wolf. They are doubles of each other, but this is not to say that they are opposites. In a social group that includes, at various times, Giles, Angel, and Spike, Oz and Xander are more alike -- in age, outlook, and loyalty -- than not.
(It's somewhat strange to write this essay after nearly two months' worth of ship_manifesto essays; I'm far too attuned to what others have said, how other arguments have been built, what other fans look for in their favored pairings. I'm going to review the canon relationship between these two, because it consists of a fascinating and wonderful transition from paranoid doubling to a friendship of equals, but I'm *not* going to highlight the so-called subtextual "evidence" for the puretruethwarted love of Xander and Oz, like Xander's "I'm used to handling the Oz full-monty" in "Beauty and the Beasts" [3.3] or their concussed bondage fun in "Living Conditions" [4.2]. I'd prefer to follow what Kat Allison has deemed the alchemy of slashing, in which we "create complicated, nuanced, gritty and convincing relationships by seeing down to the guts of characters, and building up from there with their imagination and their intuition for what makes *these two* work together." In other words, canon provides characterization, but fic makes it happen, unfold, grow, and *become*.)
Oz: Nobody like my Willow.
Xander: No, sir, there is not. 
The first phase of the Oz-Xander relationship in canon is one of doubling and reflection through, via, and around Willow. When Oz first appears in "Inca Mummy Girl" (2.4), Willow's unrequited crush on Xander is well-established. Although the Oz/Willow relationship is developing fairly well in the time during and after "What's My Line?" (2.9-10), it sharpens and triangulates during the events of "Surprise/Innocence" (2.13-14), and the impetus for this is Willow's discovery of Xander's relationship with Cordelia; having found them kissing in the stacks, having told Xander that "it just means that you'd rather be with someone you hate than be with me" -- the *first* time she's acknowledged her feelings to him -- when Xander develops his weapons-stealing plan, she and he are tense and uncertain with each other.
Willow: What do we do?
Xander: I think, ahh, I think I may need Cordelia for this one.
Xander: And we may need wheels.
Cordelia: Well, my car is -
Xander: It might have to be bigger.
Willow: No problem. I'll get Oz. He has a van.
Willow brings Oz into the plan, it seems, for pragmatic reasons -- "He has a van" -- and emotional ones that become clearer while she waits with Oz for Xander and Cordy. She asks preemptively if he wants to make out. As Oz himself notes, "Well, to the casual observer, it would appear that you're trying to make your friend Xander jealous or even the score or something. And that's on the empty side."
While Willow originally arranges the doubling/contrast of Oz and Xander, it soon exceeds her. That is, the scene at the weapons facility, with its intercuts between the van and the store-room, continuously displays the differences between the two. Xander tells Cordy, "I'm seventeen. Looking at linoleum makes me want to have sex" while at the same moment, Oz demurs Willow's offer.
In many ways, in these scenes, Oz is not!Xander. Xander's fractious, banter- and macking-heavy relationship with Cordelia stands in contrast to Oz's restraint and respect for Willow.
"All I know is I'll never be able to look at him the same again." 
These parallels and contrasts between Oz and Xander emerge all the more sharply in "Phases" (2.15) as the narrative focuses on secrets and sexuality. For Oz, the secret is his new lycanthropy; for Xander, it is Larry's homosexuality and the implications of that for Xander's own identity. The sexualization *and* gendering of lycanthropy, such that it becomes equated with male desire, is made explicit several times in this episode. For example, the (unknown) werewolf hunts the make-out point because, as Cain notes, "They're suckers for that whole sexual heat thing". And Giles' description of a werewolf's character is rapidly glossed by Buffy:
Giles: And it, ah, acts on pure instinct. No conscience, ah, predatory and, and aggressive.
Buffy: In other words, your typical male.
Xander: On behalf of my gender -- Hey.
In an episode about the various dangers and dimensions of male sexuality -- from Angelus's murder of Theresa to Larry's harassment to Larry's coming out to Xander and Oz's respective relationships with Cordelia and Willow -- Xander's acknowledgment of *his* gender is notable. His own desire does battle with his conflicted feelings for Willow.
Willow: I'm just saying Xander and Cordelia? I mean, what does he see in her anyway?
Cut to Xander and Cordy making out.
Xander: But what could she possibly see in him?
Once again, Willow becomes something of a mirroring figure for Xander. The Xander-Willow dynamic is central, and Cordelia and Oz are peripherally associated with it. But Xander complicates this exceedingly explicit heterosexual dynamic by commenting -- as he has on many a male character -- on Oz as an object of desire:
Xander: I just don't trust Oz with her. I mean, he's a senior, he's attractive -- okay, maybe not to me, but -- and he's in a band. And we know what kind of element that attracts.
Cordelia: I've dated lots of guys in bands.
Xander: Thank you.
Later in this episode, Cordelia and Willow commiserate together in the Bronze; it's interesting, from the perspective of gender and socialization, that unhappiness with men has brought them together after a history of mutual dislike, if not loathing.
Willow: Oz and I are in some sort of holding pattern, except without the holding or -- anything else.
Cordelia: What's he waiting for? What's his problem? (rolls her eyes)
Oh, that's right, he's a guy.
Willow: Yeah, him and Xander. Guys.
Cordelia: Who do they think they are?
Willow: A couple of guys.
As Buffy did when identifying the werewolf with a man, Willow and Cordelia classify Oz and Xander, and the problems they have with them, as an issue of gender. This is also the second time in the episode that Xander has specifically been identified *as* a guy.
The equation/identification, or doubling, of lycanthropy and (homo)sexuality is impossible to ignore in this episode. In searching for the werewolf, using the gendered assumptions that he acts bestially, Xander inadvertently encourages Larry to come out in the locker room. The locker room is a liminal, intimate site, full of privacy (lockers; as Buffy says in "Gingerbread" [3.11], "locker, first syllable LOCK") and publicity (shared nakedness), where secrets come out and are shared. As Larry says, implicating Xander in his new self-identification: It's ironic. I mean, all those times I beat the crap out of you, it must've been because I recognized something in you that I didn't want to believe about myself.
Xander might be like Larry; he might be like Oz. Or is Oz like Larry, who is like Xander, which might mean that Xander is like Oz? Or is Oz like Angel(us) -- they *do* face off over Theresa's corpse. The tangle of identifications, in an episode in which even Giles, usually the most (lamentably) sexless of characters, is sexualized (by Cain, regarding his relationship with Buffy), underlines and highlights the "dangerous, aggressive" overweening nature of male desire in the Buffyverse.
Willow: Is it Oz? Don't worry about him. He's sweet, but...he's not you.
Xander: Yes, he is. And you should go to him. 'Cause he's me. 
After "Phases", the blurring and reflection of Oz and Xander continues. Xander tries to confuse Willow by claiming to be Oz in "Bewitched, Bothered & Bewildered" (2.16), and in "Becoming", a concussed Willow confuses Xander for Oz when she hears "I love you".
Things only grow more fraught in the third season, when Xander and Willow find themselves honestly -- rather than magically -- attracted to each other. After being discovered by Oz and Cordelia in "Lovers Walk" (3.8), everything changes. Cordelia and Xander never quite make up, while Oz and Willow, eventually, do; Xander is haunted by the event more than anyone else. By "Gingerbread" (3.11), he's still feeling paranoid and doubted.
Xander: But I'm talking about the future guilt. Look, everyone expects me to mess up again. Like Oz. I see how he is around me. You know, that steely gaze...that pointed silence.
Buffy: 'Cause he's usually such a chatterbox.
Xander: No, but it's different now. It's more a verbal nonverbal. He speaks volumes with his eyes.
While Cordelia, Buffy, and even Willow verbally confront Xander with his guilt, it seems the guilt is worst when he consider how the discovery damaged his relationship with Oz.
Oz is, however, as Buffy points out, not all that talkative at the best of times. In the wake of "Lovers Walk", he retreats into radio silence. He tells Willow in "The Wish" (3.9):
"You can leave me alone. I need to figure things out.... Look, I'm sorry this is hard for you. But I told you what I need. I can't help feeling like the reason you want to talk is so you can feel better about yourself. That's not my problem."
Talking out issues is not Oz's preferred method of dealing, and one (possibly unintended) effect of this is the ratcheting-up of Xander's paranoia. While others appear to blame Xander for the kiss(es), Oz's actions in "Bewitched, Bothered and Bewildered" suggest that he, probably, doesn't; in that episode, he punches Xander after having had to "listen to Willow cry about *you*", then helps him up and calmly joins the search for rat!Buffy. To my mind, the punch was less about (stereo)typical jealousy than about Xander having upset Willow, so it stands to reason that in all likelihood Oz doesn't blame Xander.
I don't know. I *do* know, however, that "Gingerbread" is a turning point in the Oz-Xander dynamic. While much fanfic -- which I'll turn to in a moment -- makes "Lovers Walk" the pivotal episode, it is the later one that seems to me to be significant. Early on, Xander and Oz share a fairly awkward lunch conversation over cafeteria burritos; by the end of the episode, having banded together first offscreen to locate the confiscated library books, then to "rescue" Willow from the clutches of MOO, they crash through a crawlspace and fall into a tangled heap on the pile of books.
From this point onward, Oz and Xander no longer (merely) double each other. They become friends, debating the powers of kryptonite in "Helpless" (3.12) and discussing the semiotics of cool in "The Zeppo" (3.13). The nature of this friendship -- close, comfortable, teasing -- is significant for any number of reasons, but the most important one is that it's so damn *lovely*. Xander's social insecurities are tamped down (a bit, anyway) in the presence of his first male peer since Jesse's death, and Oz treats Xander with the same terse affection that Willow, Cordelia, Giles, Buffy, even *Angel*, and Devon receive. This friendship persists through the rest of Oz's tenure in Sunnydale; even during his return in "New Moon Rising" (4.19), Xander is the first to greet Oz at the door of Giles' flat, and they talk at some point later that day, as Oz reveals in his conversation with Willow.
"Gingerbread" is so important because it picks up and transforms the themes of "Phases". The pivotal event between burrito-awkwardness and crawlspace-intimacy is the locker raid: Secrets come out, and the books -- knowledge -- are stolen. While yelling at Joyce, Buffy explicates the link of knowledge between lockers and books: locker, first syllable LOCK. They're supposed to be private. And they took all of Giles' books away.
Oz and Xander team up, *offscreen* (and that's a missing scene I need to read about), to, first, find the books and, next, save Willow. Their quest is completed when they land on the books themselves, and as wanky as it may be to note, the fall *into* knowledge is the transformative moment when they pass from paranoid doubles to reparative friendship. That is, the doubling-via-Willow can be read as an example of Sedgwick's "'paranoid Gothic'" with its inscription of homophobia in the figure of the double--"the feared and desired other" (Jagannathan, para.2; Sedgwick 1990, 187), a literary structure which "powerfully signified...the inextricability from that formation of a strangling double- bind in male homosocial relations" (Sedgwick, 187). Xander's desperation after the Larry interview to cover up what was said, and his lashing out at Oz's lycanthropy, describing it to Buffy in highly demeaning terms -- We're talking obedience school, paper training, Oz is always in back burying their things, and that kind of breed can turn on its owner -- both suggest a real paranoia, a position of suspicion and secrecy. Oz, as a male figure whom Xander considers attractive, comes to bear the brunt of Xander's paranoia; he is still the paranoid object, for related but additional reasons of guilt and worry, in "Gingerbread".
The fall changes all that. If Oz ever did distrust Xander, he no longer does, and Xander is at last more comfortable, if ever-fidgety, with Oz. In a later essay, Sedgwick suggests an alternative position to the paranoid one: borrowing from Melanie Klein, this is the reparative position, one which emerges from, and operates on, love and hope. Sedgwick calls this position "an anxiety-mitigating achievement...from which it is possible in turn to use one's own resources to assemble or 'repair' the murderous part-objects into something like a whole" (1996, para.5). She emphasizes further that this is a *position*, not a personality trait, since "it is sometimes the most paranoid-tending people who are able to, and need to, develop and disseminate the richest reparative practices" (1996, para.13). Thus, although Xander will always be jumpy and frequently uncertain -- witness "The Zeppo" (3.13) -- he is capable of loving, hoping, and repairing around Oz.
That Oz and Xander become friends is the best thing about this ship. It provides the brightest nugget of relational dynamics from which to change and transform the characters and slash them together. It is, on its own, the sole example of egalitarian male friendship in seven years of BtVS (and, aside from the glory of Wes/Gunn, in five of AtS). As one celebrant of this form of friendship has noted, "the coupling may be fragile...but the isolated, alienated [and paranoid] subject position is a thing of the past" (Livett, 2003, para.28). Having come together as friends, they form a
"fractal" pair who refuse to allow any space between them for the exchange of either goods, money, or women: the only exchange between them is words. In Deleuze and Guattari's terms, this is a "molecular" twosome; not the One and the Other of psychoanalytical identity but the double which allows a continuous 'becoming'. (Livett, para.16)
I am not extolling the absence of women in this friendship; far from it. Willow's presence becomes, after "Gingerbread", less a paranoid dark mirror and more a common affection for Xander and Oz.
Too many girls. I miss Oz. He'd get it. He wouldn't say anything, but...[coughs]. He'd get it. 
At the end of "New Moon Rising", Oz leaves. Permanently, this time, and he's rarely mentioned ever again, except by Xander. The ramifications and implications Oz's departure has for their friendship are manifold, and have been considered from a variety of angles.
The departure heightens the distinctions between Oz and Xander; while Oz is mobile, Xander remains rooted to the Hellmouth. Oz cannot bear to be around Willow once she no longer loves him, while Xander preserves and deepens his friendship with both Buffy and Willow long after either of them evince attraction and interest in him and vice versa. Xander is externally-focused, frequently worried about his reputation, his standing in others' eyes, a trait which only sharpened to cleaver-like proportions in his paranoia over ss.2-3, but Oz is notoriously laid-back and internally-driven. *His* issues concern identity and self-control, while Xander's deal with acceptance.
They complement each other; they've fought together, provided back-up to Buffy and Willow, and they could work marvelously well.
"Yes, my friend and occasional lover?": Fic 
Fic in this ship once proliferated like kudzu, like classic Xanderyammer, like spangles on Devon's shirt. Before the advent of S/X in s4, O/X was the dominant Xander-slash ship. Since then, however, interest in this ship appears to have dwindled remarkably. There may even be greater enthusiasm for Giles/Xander slash than for O/X. It's Oz's fault, of course, both for leaving and for being (so I hear) so terribly difficult to write.
But O/X is a chance, I believe, to write a non-fanonical Xander, an opportunity to let Xander relax a little and just *be*. Let's face it -- in the *best* S/X out there (the work of, for example, witling, _dellamore and mpoetess), Xander remains a very nervous, very tetchy guy (as he probably should be for dating a vampire). With Oz, he can chill; other than a wayward bite that breaks the skin, he has very little to fear from Oz. Both Oz and Xander are built for the long haul in relationships; Oz was with Willow for nearly two years, while Xander and Anya lasted even longer, and were going to be married. What's more, they've both been inexorably marked by the hellmouth: Oz by the wolf, Xander by Caleb. It's difficult to imagine starting a relationship with someone innocent of hellmouthy goings-on.
Before I get to the kind of O/X I like -- the mellowfic -- I should point out that there are other, very strong streams in the ship's fic. The largest of these is dark(er)fic; there is also the fun of threesomes and moresomes.
"Hell, I could fit Oz in my shaving kit, but come a full moon, he had a wolfy mojo not to be messed with. Powerful": Darkerfic 
Darkfic in this ship usually dwells on wolf!Oz, as a villain or, more usually, as a bestial force -- of violence, desire, what have you. Te's Strays series, an AU in which Oz eventually bites Xander, is probably the best known, and it's a powerful ride and fully characterized. Benaresq's About Wolves is very dark, bloody and violent, while other wolf!Oz fics concentrate to a greater extent on the wolf-as-sexual force; these include Claire's Tainted Mine and Hungry. Wishverse fic, like Pet's dog and Dolores Labouchere's Let Forever Be, finds its darkness in the figure of vamp!Xander, as does the excellent Take This Waltz by Dellamore, set at the start of s4. Transfer, by Jane St. Clair and Te, is different; the darkness derives not from translated/literalized metaphors like werewolves and vampires, but from the miasma of emotion and betrayal after "Lovers Walk". Xander and Oz are (all too) human in this fic, making it, perhaps, the most disturbing of all.
"Man, the physics of threesomes can get so complicated": Oz + Xander + n 
A wonderful subgenre unto its own in this ship is the threesome fic. In my own writing, I've found that Oz and Xander lend themselves to threesomes better than any ship I've tackled. Whether this is due to the pair's alchemy, Xander's inherent sluttiness, Oz's flexibility, or something else altogether, they *work* with someone else in their bed.
The natural third in an O/X/n threesome is Willow, and there are some wonderful fics that explore both the emotional and the sexual possibilities of this combination. Victoria P.'s The Night Is Young and We Have Umbrellas In Our Drinks looks sympathetically at the three after "Chosen", while Kate Bolin's Summer Boredom and Fall Frolicking (which adds Cordy to the fun) accomplishes some X-rated high-school hijinks in the summer and fall after s2. Dolores Labouchere's Dr. Livingstone, I Presume? explores the flexible sexualities of both Oz and Willow. Sheila Perez's Can't Touch the Sun is a serious futurefic, in which "Lovers Walk" happens all over again, with a much different outcome. Willow also figures, for a time, in Meagan's "Marked" series, which I discuss in the next section.
While Willow's addition to the pairing can result in angst -- or, at the least, some serious emotional undercurrents -- Oz/Xander/Devon fic tends to be good, dirty slashy fun, with an emphasis on raging hormones and intricate sexcapades. Superb examples are Te's Mix, Mix II, and Xanderslut (which has additional pairings, both het and slash, and was cowritten with Debchan and The Spike). A pissy, jealous Devon narrates Agonized Music, part of the Ego Strawberries series by Queena, while Devon and Oz enable a Spike/Xander relationship both verbally and physically in Pet's Social Studies, as well as the other stories in the Education Series.
Finally, Rabid X's Cyrano Ain't Got Nothing on Me successfully brings Spike into a complex relationship with Xander and Oz. On Her Face by Woodinat is one of the (regrettably) few Giles/Oz/Xander fics, and is terribly funny.
"He makes 'always' seem like such a little thing, and little things so important": Xander, Oz, Mellowfic 
My preference in O/X stories lies in what I'm calling -- for lack of a better term -- mellowfic. These are stories that concern the ease and boyishness of Xander and Oz, that provide snapshots of moments at canon's periphery or explore a burgeoning relationship.
Such fics are, almost always, told from Xander's perspective, and that's an interesting phenomenon that I can't quite explain. That is, I can imagine what Xander sees in Oz -- coolness, confidence, quiet -- but, especially given the popularity of Xander as a character, it's odd that there are many fewer stories looking at what Oz could see in Xander. Other than Oz's reputation as a tricky character to write, I don't know what accounts for this imbalance.
Premier among the mellowfics is Sheila Perez's Kryptonite. Told from Xander's POV, it concerns the awkward, tender growth of a relationship with an Oz who's returned after his departure in "New Moon Rising". This story exhibits all that's the best about this ship: its humor, its honesty and maladroitness, its sense of potential explored and fulfilled. Perez also wrote Halcyon and On and On, an alternative-future story set after Angel and Cordy join forces with Doyle in LA. Another splendid fic is My Little Always by Morphea; futurefic, told in the first person by Xander, it's indescribably good. *This* is the sort of Xander that I see most often in this ship and rarely, if ever, outside of it: he's smart, funny, twisted and melancholy, as far from the babbling fool as you can get.
Van Shopping, Highway 15, and The Curve of Your Lips Rewrites History, all by Kate Bolin, are the mellowest and grooviest of them all. Bolin not only gets Oz thoroughly, but her Xander is sweet, never saccharine, anxious but never flailing -- pitch-perfect. James Walkswithwind's Stand With You is a small, heavenly-melancholy treat and the Best-Laid Plans series by Wyrd Chaos is both funny and touching. Kyra Cullinan's Coming Over the Starnbergersee and Puca's Shadowboxing both buck the Xander-POV trend, and present their stories from Oz's eyes. Cullinan's Oz is an awkward, concerned outsider to the Scoobies, uncertain how to help after Buffy's disappearance in "Becoming", while Puca's is an older and more cynical version at the time of "New Moon Rising". Like the previous two works, Lime Crush Has No Inherent Meaning by The Spike is from Oz's POV. Moreover, it is -- and I've said this before, but it bears repeating -- my favorite piece of pornography ever. It's stunning. And it's Oz on Xander in every possible way.
Two old-old-*old* school series should be mentioned, not only because they present the general outlines of mellowfic, but because they're gems of simple, straightforward storytelling: Karen's
Proof [series] (forgive the terrible look of the site) and Meagan's Oz/Xander, including the "Marked" series.
More recent works that deserve attention include Lessons in Cool: That Music Thing by Tesla and Dessert_First, a tagfic written in alternating perspectives that captures the essence of the ship's mellow sexiness. Dolores Labouchere has been writing this ship, as well as Angel/Oz and Joyce/various, for a long time, and his Back for Good and Night Mail are some of his best work, extremely *louche* and lush and warm. This untitled piece by Witling (the author formerly known as Wiseacress) exemplifies her superb Xander as well as an Oz who's sharp, a little freaky, and exceedingly lovely, as is this ficlet by Spuzz.
"Giles would know what Oz was talking about, but Xander doesn't really": Other Resources 
I've listed some resources beyond the individual stories recommended above. There is no longer a dedicated Oz/Xander archive, but, first, Laconic, an Ozslash archive, does have a list by pairing and, second, I've been working for about a year on trying to build an Oz/Xander zone for the Guild.
If any of this essay has piqued your interest in this ship, do be sure to check out these sites, communities, and lists:
Masterlist for the Oz/Xander ficathon;
could_be, a shipper community I mod;
laconicoz, the brother community to the Laconic archive;
and the Xander_Oz listserv on Yahoo, which is extremely, heartbreakingly low-traffic.
There are as of yet no vids for the pairing, though Sheila Perez promises she might, perhaps, if we're all very good, be working on one.
In the end, what this ship comes down to is pretty simple. There are thousands of ways that they can, in Allison's words, "work together". I find myself, for once, agreeing with Willow: Xander and Oz are a couple. Of guys.
Thanks to Sheila, Dolores, Spuzz, Di, Kate and Spren for cheerleading, handholding, and inspiration; and to Kit for hardcore research help and puretruetheory love.
Cut-text from "Kryptonite", Perez.
1. Xander in "Choices" (3.19)
3. Xander in "Phases" (2.15), on Larry. Or maybe Oz.
4. "Bewitched, Bothered & Bewildered" (2.16)
5. Xander in "I Was Made to Love You" (5.15)
6. "Highway 15", Bolin
7. Xander in "Potential" (7.12)
8. "On Her Face", Woodinat
9. "My Little Always", Morphea
10. "Kryptonite", Perez
Jagannathan, Mytili. [nd] "The Beast in the Closet". Retrieved 18 Oct. 2004 from: here.
Livett, Jennifer. (2003). "Odd Couples and Double Acts, or Strange but Not Always Queer: Some male pairs and the modern/postmodern subject." Australian Humanities Review #21. Retrieved 15 Oct. 2004 from: here.
Sedgwick, Eve Kosofsky. 1985. Between Men: English Literature and Male Homosocial Desire. New York: Columbia University Press.
-----. 1990. Epistemology of the Closet. Berkeley: University of California Press.
-----. 1996. "Queerer than fiction." Studies in the Novel, 28:3. Retrieved 16 Oct. 2004 from EBSCO Academic Search Premier.
Authors on LJ
Bolin, Kate: katemonkey
Cullinan, Kyra: moireach
Labouchere, Dolores: greatforce
Perez, Sheila: mimesere
Rabid X: rabid_x
St.Clair, Jane: 3jane
The Spike: spike21
Victoria P.: musesfool
Walkswithwind, James: zortified
Wyrd Chaos: wyrdchaos