I don't understand where wireless comes into your project. Explain, please.
Things like XBees and bluetooth are used to get data from one place to another. The XBees have the ability to have sensors directly connected, and send that sensor data periodically/when it changes. But, what sensors are to be wireless and which are to be wired?
Given that you appear to be trying to make a wearable device (at least as a proof of concept; the LCDs available are not generally watch sized, and that is what you'd need for a real wearable), I don't see where the need for wireless comes from.
You also haven't mentioned what data is to be transmitted, how far, how often, or how fast.
I'm in the uk so the provider is actually quite near me
Which one? Sparkfun? That's where I'd go, but they don't appear, from a quick peak at MY map, to be anywhere near you. Could be that I need a new map.
anyway about the blood oxygen sensor could someone tell me if i'll be able to connect both the display and the sensor in one wireless technology for the lilypad
Yes. Or no. Don't you think that it just might depend on which sensor you are talking about and the wireless technology you are referring to?
A graphic display would be best i think,just showing numbers won't be good enough for getting top grades.
An integrated project, thoughtfully designed, working, and documented is going to make more of a difference than a graphic display vs. a character display.