what type of paint or stain should i use on outside wood furniture?

Yes, oil-based is recommended for outside use. I would stay away from "Water-Protection" products that sit on the wood surface and make the rainwater bead up on it. This is wax-based and isn't good for the wood. If you go with a stain, get a good PENETRATING stain. That's the best for the wood. They come Clear, or in Colors. If you paint, use an oil-based product.

Good luck!!

To be honest, I would first make sure that the furniture isn't a valuable antique that's been passed down through the years. There was an episode of 'Antiques Roadshow' where a woman bought a wooden table for $25 and sold it, at auction, for $490,000. If it's not a valuable antique, then I would use about a 150 or 180 grit sandpaper and give it a quick sanding over the entire piece. This will knock down any gloss on the piece so the paint will stick. I would then make sure the piece is good and clean. If you are looking for the 'distressed' look, there a number of different things you could do, depending on the desired look: randomly strike the piece with a hammer or a piece of swingset chain (or similar); use paint stripper and apply to finished paint and remove after a few minutes (will give the appearance of old and peeling paint). Randomly striking the piece should be done prior to painting. This will give the piece the appearance of having dings and dents. As for the paint, use a quality oil based primer and paint. There are different types of finishes as well but for furniture, I would go with nothing less than a semi-gloss finish. The paint store should have samples of the different finishes.

I would recommend the oil based paint or stain for outdoor wood furniture.

There should be light colors used in the furniture. If you are matching the colors, then you might need some other color choices according to the arrangement.

Oil base is always better, but harder to work with. Go to your local Home Depot or Lowes they will be of great service to you.