Ideally, the compund should be removed, which could allow for a more strurdy fixing of the tool post to the cross slide. Since I don't have a mill, I have no way to make a big ol' block of steel to the correct shape for this, so the compound has stayed.
As for the designations, the carriage itself is called the Z axis and the cross slide is the X axis. I guess these are related somehow to a plan view of a part drawn in CAD
(Note: The opinions expressed in this post are my own and are not necessarily those of CNCzone and its management)