No, it's not a Volkswagen advertising campaign. When you see "VW" logo on a Oaxaca city bus, it refers to the Volkswagen dealership, northeast of the city center (the VW logo on this map):

Click map to see full size image
Map © 2009 Económica Rent-a-Car, Puerto Escondido

So, if the bus has the VW logo on the windshield, that means it goes past the Volkswagen dealership. However, Oaxaca city buses list all the destinations on their entire route so, depending on where you catch the bus, it may have already passed Volkswagen on its way downtown. Volkswagen is a major transfer point: buses to Tule, Tlacolula and Mitla all stop just across the street from Volkswagen, next to the baseball stadium.

Another potentially confusing bus destination is Central (see map), which doesn't mean the "Centro", or city center but, rather, the Central de Abastos area where the second-class bus station is. To add to your confusion, many buses will say both Central and Centro, which means they pass through downtown (usually near the zócalo) on their way to Central.

The Chedraui supermarket (see map), southeast of the city center, is another common bus destination: you'll see that on a lot of buses. If you are heading to some of the towns east of the city (Tule, etc.), you should be able to catch a bus directly to your destination anywhere along the Periférico or ring road, between Central and Chedraui.