Refurbished. It's when they give an old product a makeover and resell it at a cheaper price. I've never heard of a refurb O2...some people talk about cleaning them but I've done a good bit of research and that seems bunk. Gonna have to bite the bullet and get a new one...hey, I'm about to as well.
That definitely sucks but you don't have to replace them right away. If you have an inspection coming up just disconnect the negative battery cable for a bit and it will clear the system for a while. That's what I did!
If you don't have a CEL I wouldn't replace the O2s....they shouldn't affect gas milage at all. You can get some fuel injector cleaner or a lot of people do seafoam...you can do a search and get tons of info.