We really need an FAQ for this, if I wasn't so lazy I'd write it myself
The Lambda / O2 sensor is fitted to the turbo downpipe on the left hand side of the turbo. You can just about see it if you open the bonnet and look down the left.
With a standard ECU, you need to use this sensor as it controls emmisions and closed loop ( cruising ) fuel. People with aftermarket or programmable ECU's dont need it though, but standard ECU's do. If you think it is faulty, do an ECU fault code check ( there is already a FAQ to do this ). Symptoms of it being faulty are engine running excessively rich and / or lumpy idle.
The sensor that goes into the exhaust further back under the passenger seat on the Cat ( or Cat replacement pipe for aftermarket exhausts ) is only a temperature sensor and is used to light a bulb in the dash to tell you when the Cat is too warm. This sensor is not connected to the ECU in any way and does not control fuelling, only thing it does is warn of excess Cat temp. It can be removed safely. Common fault with them is the braided wire shorts out and lights the bulb in the dash. Either take the bulb out, repair the cable, remove the sensor or just ignore it.
If anyone ask this question one more ****ing time I'm going to go spare
