xz is officially lzma2, as used the same liblzma as the original legacy lzma1. Basically people used lzma before it was ready, so they renamed the final version to avoid confusion over the incompatibility. lzma is now a symlink to xz.
both lzo and xz are very useful, but for differn't things, lzo is most useful when only using the compressed data once, and xz when it is write-once read-many, so you can afford the high compression times and memory requirements.