The Oxygen Sensor is a sensor which reads the exhaust mixture when exiting the motor. If you have a bad O2 sensor then your car will not run like it should because the fuel system is getting faulty readings from the ecu.
Ill put it this way: Your motor needs the right fuel/air mixture to run at full potential. The O2 sensor tells the ecu how well the motor is burning the fuel. I have a feeling you had your ecu checked and the diagnostic pinpointed the problem to the sensor. Bottom line is if that is the case then get the o2 sensor replaced...soon.
Clicking, as in a rubbing/knocking noise could be the timing chain tensioner, if the noise is coming from the front left of the motor. Also have this checked out because you dont want to neglect the timing chain, it will teach you a very expensive lesson.