I have 142,000 miles on my 02 and the cat has finally gone. The SE light went on and that is what the diagosis found. The bill is ~$1300 (oh, this includes an oxy sensor as well), and will replace the entire system (I believe).

Anyway, can somebody explain exactly where the cat sits in relation to the exhaust, and if I need to replace the entire system, then why not buy an aftermarket performance system (Borla is ~800 at Moss) and use it instead, or does that not include the cat?

Just looking at options.

 

The cat is in the header, not the exhaust.

 

Since your cat is legitimately "toasted" you have a good excuse to replace the CAT with a high flow unit. I would probably put an aftermarket metal CAT in there & try to have them flange the header so it'll just bolt on if you ever need to replace it in the future. Of course, I'd think of this as option #2, only if you can get away with putting a header on.

If you can get away with putting a new header on (one that has a CAT that will pass smog) I'd do that. All depends on your state's smog laws & your local smog check guys.