which one's better strictly for SEO reasons:

http://x.yz.com

or

http://yz.com/x/

or

x-y-z.com

assuming x,y,z are equal...

Which ever is better for my user to remember. From SEO point of view if x,y,z are keywords then x-y-z.com

Why?

(I am not disagreeing or agreeing, I would like to know why)

Because a keyword-rich SLD (second level domain) name can help you with rankings. If you have xyz.com, search engine will treat xyz a single word and you will have a harder time trying to hit the top-10 for each separate keyword - x, y, and z. Hyphen "-" is a character treated as a delimiter by ALL SEs out there. So, x-y-z.com is an ideal variant if you want all three keywords in the URL.

x.yz.com and yz.com/x are both easy for you to tweak once you buy the domain name yz.com. As a rule, search engines put less weight into the factors that are under your influence than to those which are more difficult for you to control, in this case, buying a special domain name with all three keywords in it.

Just be careful about having too many dashes in your domain name. One is ideal. Two is probably the limit before it starts to possibly look spammy. Also, keep your human visitors in mind. Which URL will be easier for them to remember? (If you're only targetting search engine traffic then don't worry about that).