For me, the good qualities that stand out in stark relief in Season 7, they've always been there. It's just that he's finally outgrown his more petty and selfish qualities. He's finally become more secure with who he is and so his lack of raging insecurities don't lead to him taking it out on others.

It's like even when he was being a jackass in the past, there'd still be good stuff going on (his loyalty to Buffy, his trying to help his friends without concern for his own safety). I do think Season 3 is where Xander is at his worst and I'm having trouble thinking of good stuff in Season 3 besides the Zeppo.

Pretty sure I've now talked about Xander way more than I've ever wanted to!