I can see how that can clear the check engine light but how would that
affect the smog check readings?

You can try installing a spacer on your rear o2 sensor. I have a catless
exhaust on my 03 WRX. The spacer pulls the o2 sensor out of the direct flow
of the exhaust , no CEL and gets threw emissions. Costs about $2. You get 2
spark plug spacers available at any autoparts store. I can dig up the part
number if you need it. You will need to drill out the opening some on the
spacers too.

My '02 Impreza Outback got 121,000 miles, and my local subaru dealer
has got a Cat converter check engine code reading.t. They quoted me
$850 to replace the Cat ($650 part + $200 labor).

All I need is to pass the California smogs. I am not driving the car
much anymore anyway (gas prices), just keep it in the driveway for an
occasional camping trip (still cheaper than renting... provided no
major repair costs) so giving out $800 just to register the thing just
does not sound right.

Goggling produced a $150 (???) "Catco" converter. Does anyone have
experience with this beast? Can I bolt it on myself to keep the
smoggers happy?

Also, I am not sure if the sensor in the car gives a yes/no kind of
answer, or actually produces a real number. Meaning that if I knew
that the reading was on the borderline, can I make the car barely pass
somehow (heard some urban legends on driving on a highway before the
test).