Fox has been a real disappointment, but this squabble is between leftists - the PRI (governorship of Oaxaca), which is the old left, similar to the Democrat Party, and the followers of AMLO (radical Marxist/anarchists, similar to the groups now taking over the Dem Party). Fox obviously held off because he thought he would be accused of stomping the left if he sent federal forces into Oaxaca, although personally, I think he held off way too long.
While the PAN government has not been spotless, it has been better and some economic reforms and privatization have been carried out. It's a cumulative process and Fox was not a very brilliant or charismatic leader, and in fact is somewhat of a flake in his personal life, even to the extent that his personal dramas (with his girlfriend, for example) impeded his ability to govern. Hopefully, Calderón will do better. He seems more intelligent and more stable than Fox, and I think that's one of the reasons the radical left is so desperately trying to keep him out of power.
Site for story of October 2, 1968: Mexican Army kills students
http://fcis.oise.utoronto.ca/%7Edaniel_schugurensky/assignment1/1968mexico.html