Check Engine Code?

it has rained a lot the last couple days, and for some reason my check engine light went on... i got my handy dandy 'CarChip' out from under the seat where i hid it from my parents and checked to see what the problem was. It gave me a trouble code of P0130 which it says is an 'O2 sensor circuit malfunction (Bank 1, Sensor 1)'. what does that mean and what can i do to fix it b/c i hear it retards my timing when the check engine light is on and it also cant be good for my motor??

thanks in advance, sorry its long

I have not had this problem on my 240 but i have it on my Grand Marquis 97 with a 302 in it whenever my 02 gets wet my check engine lights come on so i think it just got wet alittle try to dry it plus mine only does it when i hit a puddle.