Optical and electrical properties of silicon nanocrystals formed by CW laser-treated hydrogenated amorphous silicon-oxygen alloys have been investigated as a function of the irradiation time, for different laser power densities and alloy compositions. Raman scattering measurements indicate that laser irradiation yields a mixed phase structure consisting of silicon nanocrystals (Si-nc) embedded in an oxygen-rich amorphous matrix. It is shown that both photoluminescence (PL) and electrical characteristics clearly reflect this phase separation, resulting in a wavelength-dependent PL excitation and spectral features. Largely different conduction paths related to carrier transport within Si-nc and intergrain oxide are also detected.