[jdmccright]

There are three O2 sensors: 2 located before the cat (one for each cylinder bank, placed in the exhaust downpipes) and one post-cat O2.

I presume the diagnostic code told you which sensor was at fault...it has that capability. Ideally all three should be changed, especially if you change brands, but technically they should all perform within OEM specs.

To answer your question, yes a faulty O2 can cause poor idling and poor fuel economy. They detect the amount of unburned hyrdocarbons (fuel) in the exhaust stream and use that to adjust the amount of fuel injected into the cylinders according to your driving state...economy, performance, etc. This is to maximaze fuel efficiency and minimize pollution. When one goes bad, particularly one of the pre-cat sensors, the ECM has to resort to a set of pre-determined fuel/air "maps" to compensate, resulting in engine inefficiencies. hope this helps!