Hmm... Depends if your Air Fuel Ratio Gauge is a Wideband... If it's a narrow band it will always give you some weird readings.... But a bad o2 sensor will definently give you some weird readings.
I'm having similar problems with my 1.6L. Let me know how yours works out. I'm thinking it's something electrical but I can't pin it down yet. Might just have to go get a full diagnostic on it to find out what's up. I guess after 113,000 miles things do get worn out.
I've been having a problem after I put some spark plug non foulers on my oxygen sensors. I took them off and reset my ECU but i still have a horrible idle that stays around 200 rpms. The engine has been knocking and getting worse at idle speeds. But in the higher range its fine. Is there a way to temporarily set the ECU to a default mode where it runs rich or quickly reset my air/fuel mixture?