The O2 sensor will be pricy for that car, but it will probably help. It's a preheated (three wire) model, which accounts for the cost. I think you can get a Bosch unit at Napa that's pre-wired for the Honda for under $100, and easily replace it yourself. A Honda OEM costs $130-160. Personally, I don't like putting any non-Honda parts on my Hondas, unless the cost is prohibitive, so when I replaced mine, I went with the Honda part. My ongoing 10% discount from the dealership, a benefit of having bought a car there in the past, helps justify keeping my Honda a Honda.
Also, distrubutor timing can have a big effect. The timing doesn't change on electronic ignition if nobody messes with it, but they probably messed with it. I'm not aware of any special procedures for adjusting the timing on a Civic (because I've never adjusted the timing on any of my Hondas), but they may have missed something and screwed up your adjustment. Have it looked at again by somone more experienced with your particular engine.
