Q&A

I don't think that you have found the correct problem yet. The fact that the EGR Valve and Position Sensor were setting codes does NOT mean they are at fault. It could have been that the vacuum solenoid that opens and closes the EGR valve was sticking and not allowing the valve to close or to open up too much. First and foremost, find the root cause of the valve malfunction. The Oxygen Sensor will set codes when the car is running to rich from a sticking open EGR valve. Once you find the root cause of the EGR valve problem, then you may find that the Oxygen Sensor clears itself up. (Just for the record I worked at Ford Dealerships as a Diagnostic Technician and I have worked on these very cars for these types of problems )

the o2 sensor could indeed be the problem and is one of those parts that need to be replaced periodically. The exahust collects on the o2 sensor and can prohibit it from running correctly. Also, it can just go out all together or break off. It's a rather cheap replacement for the benefits. Plus, its not real difficult to do. If your having irradic idling, stalling, louder than normal idle and acceleration, smoking and heavy fuel consumption this could very well be your problem and in many vehicles wont show on a diagnostic if it has been broken off. The o2 has a large impact on the ECM and can cause damage to the ECM over time. If you do change the o2, remember to reset the ECM by taking off the negative battery cable for a few min. NOTE> you may have to have your vehicle relearn how it idles. You can look this info. up by searching. (your vehicle)Set idle, relearn.
Best of luck.