"But the answer apparently, when taking sig figs into consideration is 2.07 x 10^-1. Why? Aren't both answers with 3 sig figs?"
This answer is better because it not only has the right number of significant figures, but is also in 'scientific notation', which is the norm, especially when dealing with moles.
"With the last part going 8.90 x 32 = 284.80g, is apparently 285g when with correct no. of sig figs.
Why wasn't it 2.8 x 10^2 or 2.85 x 10^2?"
2.85 x 10^2 g would be accepted, and is arguably 'better' than 285g...people tend to be a bit more slack when dealing with masses in grams, just by convention.
"And lastly, when its said that sig fig calculations only occur at the end, what does this mean? In the question previously mentioned, with 8.90 x 32 as the last step, why isn't 2 the new number of sig figs required?"
You haven't really specified where 32 came from...if it came from M(O2), which would be the most obvious guess...then the table actually has 16.0 + 16.0 = 32.0...still 3 sig figs.
"And where should we take the number of significant figures our answer should be from? The numbers given us in the original question or the ones we've worked out?"
Sig figs in the final answer correspond to the least accurate piece of data used to calculate the answer. Eg. if you used a mass of 16.45g and temperature of 25.0 C and molar mass of 32.0 g mol-1, you would have a final answer of 3 sig figs. If you used an answer from a previous part of the question with only 2 sig figs to get your next answer, then your answer in the next part should have only 2. Note that scaling factors (eg. if the equation was something like 2X + Y --> X2Y) are not subject to sig figs...ie. if you multiplied your amount by 2, you would not need to put only 1 sig fig. This is because it does not count as a "piece of experimental data".