Y33 CV Axle/Rack And Pinion torn boot?

[mistermastamind]

It has been 3 weeks since I purchased my 2001 Q45t (146,XXX Miles). I must admit that I am very pleased with this vehicle. The first day I brought it home I took it to my mechanic and had him change the Engine oil, Transmission Fluid, And Rear Differential fluid. I noticed a slight oil burning smell coming from the passenger front of the vehicle since I purchased it. I thought it may have been residual oil on the undercarriage of the vehicle. Today I decided to Degrease the entire undercarriage of the vehicle by spraying degreaser and pressure washing the undercarriage. The picture below show what I discovered. I am not a mechanic but I know a torn boot is no good. The pics below show the passenger side boot that is torn, which is located just inside the passenger wheel. Can anyone explain what this boot is? Is it a CV Axle? My mechanic seems to think it is the rack and pinion from the picture on my phone, since I dropped the car off to him today right before closing time. There was a little bit of oil around the opening but I have not noticed any oil leaking on the ground. Thanks in advance for your time and input.