O2 sensors improve gas mileage and emissions, and try to modify the a/f to be as close to stoich as possible. Without an o2 sensor all that will happen is you'll run a little rich (your computers safe mode), probably throw a code and get worse gas mileage...a lot of people bypass the 02 sensor which i don't understand...(i did and wish i didn't). Same thing with the EGR...its all emissions shit...old cars didn't have them...new cars don't need them. That hole in your "midpipe" as u call it is an exhaust leak. block it off.

Matt...starts in closed loop and uses preset eeprom settings for AFR and after it heats up (about 600*) it goes into open loop.