The thermodynamics and phase transitions in lithium intercalation oxides are discussed. Changes in the host structure can be driven by configurational Li-vacancy interactions, variations in electron count or by changes in the stability of the oxygen packing. The formalism to predict the lithium-vacancy ordered configurations and their free energy is presented and calculations of the phase diagram of LixCoO2 in the spinel and layered structure using this formalism are reviewed. Layered LixCoO2 has the richest phase diagram with ordering and staging transitions, and changes in host structure at low lithium contents. In general we find relatively low order-disorder transitions due to the strong screening of the lithium-lithium interaction by oxygen. From calculating the energy difference between the spinel and layered structure for several transition metal oxides it is found that a driving force for transition to spinel will always exist when a layered lithium transition metal oxide is delithiated. The limitations of current first principles methods in studying electronic transitions are discussed.