[16v] Bad O2 sensor symptoms?

[doubt at inwave.com (Nate Mellom)]

All,
Got my '88 registered and insured this week, it's going on its first 
trip (to work, at least) tomorrow!  It's super-ish cold (25* F), but it 
started well after having sitting a week.  I took it to fill up the 
tires, and to do a short test drive before I drive it tomorrow. It's 
still got the stumbling/stalling/no power problem.  I didn't drive it 
while it was cold, I started it late tonight, put on the plates, 
transferred stuff from my '81, etc, so it was warm by the time I got to 
the test drive.
  A basic run-down of issues:
Upon starting, it held idle until it got warm, then the idle began 
hunting, from 0 to 1500 or so RPM, occasionally dying.  It started right 
up though.  Left my driveway, and it stumbled and lurched a little until 
I got the revs up, where some power kicked it, but it was still pulsy. 
At stops I'd have to feather the throttle to keep it from revving too 
low, and again, stumbles and pulses. Got to the gas station, left it 
running, and it idled fine for 2 tires, then it began hunting again. 
Drove it home, and still the issues.  Total trip lasted about 30 minutes.
The PO had done a bunch of work, including a new used distributor 
(obviously included retiming the engine), fuel system pressure tests, 
mizture adhustments, etc, all preformed by a reputable VW shop locally. 
  I'm suspecting the O2 sensor (tried to get it out, but it's very 
stuck), and I have a used replacement I'm going to swap in, so we'll see 
if that helps.  But I guess what I need to know, do these syptoms seem 
like a failing/failed O2 sensor?
Thanks,
Nate
'81
'88