  The nucleation, distribution, composition and structure of Pd nanocrystals in
SiO$_2$ multilayers containing Ge, Si, and Pd are studied using High Resolution
Transmission Electron Microscopy (HRTEM) and X-ray Photoelectron Spectroscopy
(XPS), before and after heat treatment. The Pd nanocrystals in the as deposited
sample seem to be capped by a layer of PdO$_x$. A 1-2 eV shift in binding
energy was found for the Pd-3d XPS peak, due to initial state Pd to O charge
transfer in this layer. The heat treatment results in a decomposition of PdO
and Pd into pure Pd nanocrystals and SiO$_2$.
