The dynamics of the 266 nm photoinitiated reaction of O-16(3) and (H2O)-O-18 were studied using O-16(3).(H2O)-O-18 van der Waals dimers to orient the initial reagents. In the absence of perturbations, the geometry of the O-16(3).(H2O)-O-18 dimer is such that 266 mm photolysis of cluster-bound ozone initiates glancing O + H2O trajectories, with a 3 Angstrom impact parameter. Laser induced fluorescence probes show that 81+/-7% (2 sigma) of the "new"-(OH)-O-16 and essentially all of the "old"-(OH)-O-18 products were formed with v=O, with a slight preference for the II(A’) Lambda doublets, and average rotational energies of 900+/-130 and 760+/-80 cm(-1), respectively. Approximately 19% of the "new"-(OH)-O-16 products form with v=1 and average rotational energy of 930+/-210 cm(-1). No significant OH scattering anisotropy or other vector correlations were observed. Sub-Doppler resolution experiments showed average kinetic energies for new-(OH)-O-16(v=0) products about 19% higher than for old-(OH)-O-18(v=0) products in the same rotational levels; increasing from values of about 500 cm(-1) at low rotational levels, to about 1500 cm(-1) at the highest rotational levels populated. Similar OH internal and kinetic energies were observed when the clusters were photolyzed at 281.5 nm. These dimer results are very different from those observed for the bimolecular O(D-1)+H2O-->2OH reaction, photoinitiated in gas phase mixtures of O-16(3) and (H2O)-O-18. The gas phase O(D-1)+H2O-->2OH reaction produces OH with pronounced recoil anisotropy, these OH products carry far more internal energy than seen in the cluster products, and there is greater disparity between the internal energies of the gas phase (OH)-O-16 and (OH)-O-18 products. Evidently, cooperative effects in the cluster environment result in a significant change in reaction path.