I changed the oil on my xD this morning, and thought it might help somebody if I took some pictures of the process. There seems to be some confusion as to how this all works.
Here's the filter element and rubber O-ring that comes with it. The washer at the bottom is needed for the oil drain plug, but is NOT included with the filter element. The washer has a rubbery coating on each side of what appears to be a metal washer, and must be replaced EVERY time you remove the drain plug.
This is the cap wrench needed for the filter....it's a 65mm, 14-flute wrench. I already had one of these from my dearly departed Pontiac Vibe, but it can be found at the local auto parts store. The cap requires a 3/8" socket wrench, and a ~6" long extension isn't a bad idea (though you could probably get by without it).
Looking under the car, towards the passenger side front tire, you can see the 14mm oil drain plug, as well as the filter housing.
Here, I've removed the oil drain plug and loosened the plastic filter housing...they are close enough to each other that they can both drain into the same pan. I let the oil drain for about an hour. Note that you can see that the old oil plug washer is stuck on the car...it needs to be removed. One tap with a dull chisel and hammer between the oil pan and washer knocked it off.
Here's a close-up of the filter housing. Note the rim around the edge of the plastic
cap...that sits flush against the metal housing. This is important to know.
Here's a picture with the cap removed.
Here's the cap with the old filter element in it. I couldn't tell if the "hairs" on the element were metal shavings or just the bits of the element, but they didn't glisten in the sunshine, so I tend to think it was the latter.
Here's a close-up that shows where the rubber O-ring goes. Note that it seems to have been pretty heavily lubricated at the factory.
And here it is with the element and old O-ring removed. The element just pops right out, and you can roll the O-ring upwards to get it off.
Here's the new element and O-ring installed. I rolled the O-ring into place, then lubricated it with oil so it'll go on easily.
After all the oil drains, put the new washer on the oil drain plug, and tighten that up. Then, just screw on the filter cap. Be careful when starting to screw it on so that you don't cross-thread it...turning it CCW first, then clockwise, helps prevent this. When the O-ring reaches the metal housing, the cap will get harder to turn. However, once it seats itself into the housing, turning the cap gets easier. When the cap is fully seated, it suddenly stops turning. At this point, the lip on the edge of the cap should be flush against the housing, which means you're done.
As for oil, the owner's manual says that either 0W-20 or 5W-20 is adequate. 0W-20 is only available as a synthetic oil, while 5W-20 can be had as either synthetic or conventional oil. I put 5W-20 conventional oil in the car this time, but will probably switch to synthetic at the next change. I do feel that it's worth the extra money.
Having now changed the oil in the Scion, I think I can say that I'd rather have a conventional spin-on filter. While it's nice that you putting less into the landfill with this type of system, the questionable durability of the plastic cap does concern me. Also, with a spin-on filter, you can pour oil into it to "pre-soak" the element before installing it. You really can't do this with the Scion's system.
In any case, I hope this info helps somebody.