One thing great about these discussions is it forces you to do some research and you can stumble across some terrific links. Here is a comprehensive discussion of the biosphere, more than I have ever seen. http://www.answers.com/topic/biosphere
Oxygen in the atmosphere is a function of the evolution and spread of plant life. What the implications are of the reversal of this process, ie the loss of biomass, is something I need more clarity on.
The present atmosphere would not exist without the biosphere. In order to put oxygen into the air, there had to be plants, which take in carbon dioxide and release oxygen in the process of photosynthesis. This resulted from an exceedingly complex series of evolutionary developments from anaerobic, or non-oxygen-breathing, single-cell life-forms to the appearance of algae. As plant life evolved, eventually it put more and more oxygen into the atmosphere, until the air became breathable for animal life. Thus, the atmosphere and biosphere have sustained one another.
Here's another good link. http://en.wikipedia.org/wiki/Atmosphere_of_Earth
It has a good discussion on the early origin of atmospheric oxygen and mentions that oxygen was about 30% of the atmosphere about 280 million years ago.
The constant re-arrangement of continents by plate tectonics influences the long-term evolution of the atmosphere by transferring carbon dioxide to and from large continental carbonate stores. Free oxygen did not exist in the atmosphere until about 1.8 billion years ago during the Great Oxygenation Event and its appearance is indicated by the end of the banded iron formations. Before this time, any oxygen produced by photosynthesis was consumed by oxidation of reduced materials, notably iron. Molecules of free oxygen did not start to accumulate in the atmosphere until the rate of production of oxygen began to exceed the availability of reducing materials. This point signifies a shift from a reducing atmosphere to an oxidizing atmosphere. O2 showed major ups and downs until reaching a steady state of more than 15% by the end of the Precambrian. The following time span was the Phanerozoic eon, during which oxygen-breathing metazoan life forms began to appear.
The amount of oxygen in the atmosphere has varied over the last 600 million years. Around 280 million years ago the amount of oxygen peaked around 30%, significantly higher than today's 21%. Two main processes govern changes in the atmosphere: Plants use carbon dioxide from the atmosphere, releasing oxygen. Breakdown of pyrite and volcanic eruptions release sulfur into the atmosphere, which oxidizes and hence reduces the amount of oxygen in the atmosphere. However, volcanic eruptions also release carbon dioxide, which plants can convert to oxygen. The exact cause of the variation of the amount of oxygen in the atmosphere is not known. Periods with much oxygen in the atmosphere are associated with rapid development of animals. Today's atmosphere contains 21% oxygen, which is high enough for this rapid development of animals.
Here's a graph of the atmospheric percentage of oxygen over the last billion years. http://en.wikipedia.org/wiki/File:Sauer ... 000mj2.png
Presumably the drop in oxygen to our time meant a cooler planet could not produce enough photosynthesis to capture all the CO2 so we had a lot of sequestering so to speak. Warmer weather and more CO2 presumably should be increasing biomass and therefore oxygen but we are killing the species directly or due to too fast climate change so things can only go sort of screwy. Hard to get my head around it.