Syaoran enters the xxxHolic manga storyline in Volume 9, when he visits Yūko after being freed by Xing Huo. In order to travel to the world where his clone is currently located, Syaoran pays with "the relationship", "the freedom" and "the time" (aka the time he spent in captivity, and the relationship with Sakura paid by the other Syaoran). It is later revealed that Syaoran was one of three people who paid a price (i.e. his freedom and time) to Yūko in order to save Watanuki's life after he had fallen out of a window.
In Chapter 140, Watanuki realizes he cannot remember his parents' names, and holds his head in pain, in the exact same way as Syaoran in Tsubasa: Reservoir Chronicle. Syaoran is also shown telling Watanuki, "Don't disappear."
In Chapter 146, a hand was hovering behind Sakura. Watanuki runs towards her, and the real Syaoran enters, indicating that that hand was the real Syaoran's hand. He comments that it is a dream, when suddenly, cherry blossoms begin to blow rapidly. A second hand appears, and before Watanuki is able to run to Sakura, the cherry blossoms slowly cloud his vision. The real Syaoran, as he holds Sakura, says to Watanuki, "No matter how painful it might be... I'll do everything in my might! So please..." Unfortunately, Watanuki does not hear the rest as he awakens in his own world.
In Chapter 174 of Tsubasa, it is revealed that Syaoran says, "So please... you, too, act according to what you believe in!"
Then in Chapter 181 of Tsubasa, it was revealed that Watanuki paid for the price to know the location for both of the Sakuras, his price was his memories of his past. That's why when he was in the Dream World with Sakura's clone soul he forgot his parents' names when Sakura asked something about his parents. Watanuki did this to pay back Syaoran after he paid a price to help save him when he fell out the window.
The connection between Syaoran and Watanuki is finally revealed in the Clow's future arc. Syaoran explains to the party what happened when he met Sakura (the real Princess of Clow). After he had made a wish to turn back time in order to grab Sakura's hand and save her from dying, Watanuki was born to take his place in his world. Fei Wong explains to him that "he's not a brother, he is you". And since he was a being not originally meant to be, he continues to tell him that his existence would cause only pain to those around him.