Here's the sensor ready to go in, I noticed an immediate increase in zip in the '88 and after 3 tanks of gas both cars picked up an average of 2-3 MPG.  All in all well worth the $$.

Please note the single wire sensor may cause the check engine light to come on on late 240s, '89 and up.  It does not heat up as fast as a 3 wire and this may be sensed by the OBD brain. 

Also some states are picky about this for smog even on the earlier cars, I passed here in CA with one on my 740 but your state or inspector may be different.

Converting to a single wire O2 sensor may make sense even if your existing unit tests good.  I tested the sensors on both the '88 240 and '86 740 and they tested OK based on the info at two very good pages on the subject.  http://www.volksparts.com/o2sensors.htm
and http://atlantis.austin.apple.com/people.pages/Jimbo/o2info.html The same pages also confirmed that my gradual loss of a couple miles per gallon and higher than normal readings (pass but just barely) at the last smog inspections may have been sensor related.  Single wire Bosch sensors (bosch #11027) are about $20 at the local parts store so I figured I'd do a little cut and solder.

This may cause issues with OBD equipped cars, the "check engine" light may come on.
Converting to a single wire O2 sensor may make sense even if your existing unit tests good.  I tested the sensors on both the '88 240 and '86 740 and they tested OK based on the info at two very good pages on the subject.  http://www.volksparts.com/o2sensors.htm
and http://atlantis.austin.apple.com/people.pages/Jimbo/o2info.html The same pages also confirmed that my gradual loss of a couple miles per gallon and higher than normal readings (pass but just barely) at the last smog inspections may have been sensor related.  Single wire Bosch sensors (bosch #11027) are about $20 at the local parts store so I figured I'd do a little cut and solder.

This may cause issues with OBD equipped cars, the "check engine" light may come on.
<=1
Pull your old sensor and cut the black wire about where the 1 is. Pull on the boot (2) to get the wire out of the sleeve.  The new sensor has a crimp on connector and a piece of shrink tubing.  Strip the old wire  back about 3/8" and crimp the new sensor on, I always use a small torch and solder any connections, If possible do this before putting the shrink tubing on.  A hair dryer on high should provide enough heat to shrink the tubing if you do not have a torch.
<=2
Here's the sensor ready to go in, I noticed an immediate increase in zip in the '88 and after 3 tanks of gas both cars picked up an average of 2-3 MPG.  All in all well worth the $$.

Please note the single wire sensor may cause the check engine light to come on on late 240s, '89 and up.  It does not heat up as fast as a 3 wire and this may be sensed by the OBD brain. 

Also some states are picky about this for smog even on the earlier cars, I passed here in CA with one on my 740 but your state or inspector may be different.