I will be flying into Heathrow in August and need to rent a car in Oxford for siteseeing. Any suggestions on the best way to get to Oxford from the airport and where I can rent a car (hopefully very close to where I get dropped off in Oxford)?
If there are only one or two of you, the best option is probably the Heathrow-Oxford coach: http://airline.oxfordbus.co.uk/
Not sure about hire cars at all, but Avis are near the railway station and do a "meet and great" at the railway station. If you take the coach to its final stop, which is Oxford's coach station (called "Gloucester Green"), then it is a touch under 10 minutes walk between the two stations. Or there are taxis at the coach station if you have luggage.
If there are three adults, it might be worth looking at the price of pre-booking a minicab from Oxford to pick you up and take you back to Oxford. The last time I did it in the other direction it was about £75, but there will probably be waiting charges for coming from the airport - try 001 Taxis or Royal Cars, both Oxford based.
The major well-known car hire companies all have their offices on or just off the Botley Road, the main road into Oxford on the western side. They either have their own meet/greet/pickup service from the stations, or refund taxi costs by presentation of a receipt.
When I was in Oxford I used Enterprise...they'll bring a car to you anywhere which is really convenient. You do have to take them back to their office before you go on your way but it's not far at all from the city center. I found it to be very easy and far better than trying to hunt for the office myself.