The O2 sensor provides input to the ECU so that it can 'fine tune' the air fuel mixture.  While you may be able to pass an emmissions check with the sensor unplugged even a serious knuckle dragger would probably catch it on visual inspection.

In a message dated Mon, 11 Jun 2001  2:59:37 PM Eastern Daylight Time, Philip Jones <Tewinot@AOL.COM> writes:

<< Hello All,

After an extensive search of Bentley, Muir, and VW's "Vanagon/Type II Fuel
Systems ProTraining" manual, I came to suspect a faulty oxygen sensor as the
culprit.  The way I tested it was to unplug the signal wire from the sensor
(the single wire), leaving the heating wire/ground (the double wires) plugged
in.  I did this with the engine/switch off so as to reset the memory in the
ECU.  I then took the van for a test drive (about 7 miles), and immediately
felt the back of the van (the areas between the tail lights and the license
plate).  It was barely warm to the touch.   Conclusions: running with O2
sensor plugged in causes van to run too rich, overheating cat converter.
            running with O2 sensor unplugged reduces cat converter temp.

Is the O2 sensor something that needs to be replaced immediately (if at all)?
 Does anyone on the list just leave it unplugged?  A mechanic I know drove
his van 100k miles with it unplugged.  Is there any harm in this?  The only
difference I've noticed so far (besides a cooler cat. conv.) is the van idles
higher once warmed up (around 1200 rpm).

TIA,
Philip
 >>