I would clear the code and then have the car smogged before dropping $80
on a repair that may not be needed.  If the car fails the test, now yo
know for sure you need a new converter.  Passes then the original proble
was just an O2 sensor failure.

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An aftermarket cat shouldn't be a problem, but its not as easy as
bolting it on.  You'll need to cut the old one out and weld the new one it.

And the sensor on the car is just yes/no.

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).