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Oxygen Sensor S80 1999

I have a few Q.'s. Case: S80-T6 goes in for 45k service w/ engine light on (for last several months). I pick up car and discover they "had" to replace "#1 Bank Frt. O2 Sensor". Total bill: $644.92 (45k + sensor). I was not notified that it needed to be replaced or cost etc. I refused to pay and asked they "rip it out" as I never agreed to have them install it. They credited out the cost (labor and part)and I'm to return in "a few days" to have it removed! I can't believe these people, only a Volvo dealer would pull this b.s.

Q's: What is this sensor for?
Should it cost $342.59 (labor and part)?
Can I buy the piece myself (i did see it for $134 on the web) and install myself or by simple mechanic (or indep. volvo shop)?
I have the Volvo extended warranty, dealer claims part is not covered (of course), any ideas on what I can/should do? Thanks.






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