Mark,
Ground rod X will be whatever electrode is being tested. For most new installations that would be a copper rod about 4 to 5' long by 3/8" diameter. (Our code doesn't require 8' ground rods.) Test rods Y and Z will normally be of similar sizes.
The IEE quotes that on average the X-Y distance will need to be 25 meters (that's a little over 80' to you and me). But it can vary considerably in different parts of the country due to the different soil conditions.
The purpose of moving rod Z closer to X and then closer to Y and repeating the tests is to check that the resistance areas, or voltage gradients, of the rods do not overlap.
