Lets see, where to begin?
Well, all finishes begin as penetrating finishes, meaning the first coat or two "penetrate" into the wood somewhat. The difference is that the "penetrating" finishes you are refering to stop at that point. A couple of two or three coats of an oil mixture of either tung oil or linseed oil or something of that nature. Whether it's called Danish Oil or Tung Oil or whatever, it's an oiled floor finish. Some tung oils finishes will build up to a surface finish (Waterlox is one) if you apply enough coats. These oil type finishes do not require any sanding to re-apply more finish on a worn spot. This is true. However, generally speaking, they are not as scuff or scratch resistant as the best of the surface finishes, typically urethanes. A surface finish starts with a "penetrating" sealer, whether that sealer is an oil mixture or a sanding type sealer. Then continues to apply more coats of a urethane mixture until it becomes a "surface" coated floor. There are many types of "penetrating" oil type finishes and even more of surface finishes. The key to selecting which type of finish is best for YOUR floor is:
1) wood species selection. Generally speaking, the harder the wood, the LESS need for a durable surface coating.
2) Appearence. Do you want a very low luster, natural look or a high shine, polished look?
3) Maintenence. Are you willing to do the maintenence yourself or are you going to pay a pro? Oil finishes will require MORE maintenence on your part but surfaces finishes generally require less frequent maintenence but a pro is generally employed to perform it.
Bottom line: Oil finishes require more maintenence but the maintence is simplier. Urethane finishes require less frequent maintenence but that maintenence is more complex and costly.
I hope I shed some light on this subject for you.
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