I have a 2008 standard mini cooper with 55k miles and I'm getting code P0420 which is the catalyst system efficiency below threshold (bank 1). I'm not sure if this means that I must change the upstream O2 sensor or the downstream O2 sensor. please help, thank you!

 

The downstream (after the cat) o2 sensor determines catalyst efficiency. I would check for a warranty. I believe cats are covered for 8yrs or 80k under emissions warranty. But that may only be in California.

 

Not just California, it's a Federal law:
http://www.epa.gov/obd/pubs/420f09048.pdf

 

I'd like to say at least 80% of the time is your primary cat being clogged or diminished check into warranty it otherwise would be pretty expensive

 

I had this same code on my other car (Subaru Outback), it was a cracked weld causing an exhaust leak upstream of the cat. Definitely check into warranty, mine was over 80K. I had it welded a couple of times but the welds failed, I ended up having to buy a new exhaust header and cat assembly.