Rodslinger is right. The first sensor needs to be prior to any catalyst, cuz its monitoring F/A mixture for the ECU. As a general rule, the further down the pipe you put it, the richer your mixture will end up. Not by enough to worry about though. So other than being before the cat, it doesnt really matter where you put it.
The 2nd O2 is just there to monitor emissions. It has no bearing on mixture control at all, just emissions monitoring. As such, its expected input to the ECU is in a very narrow band, so any change in exhaust configuration can set the CEL due to an out of spec reading from the 2nd O2 sensor. You may still be able to pass a state exhaust gas analyzer test, but youll fail for the CEL. This is the major difference between OBDI and OBDII, which is supposed to alert you to a problem with your catalyst and emissions. Ive even seen a clogged EGRV knock the 2nd sensor of spec even though the ECU didnt pick up the EGR problem.
Some states go as far as to inspect the 2nd sensor to ensure that it hasnt been removed and defeated. If you are unfortunate enough to live in one of these states, the trick installation is to remove the 2nd sensor gut it, install the necessary resistors, weld it up and reinstall it in the same bung. I recently saw these in Summits catalog for late model GM V8s. Theyre priced at like $80, which made me think about marketing the same thing for imports.
My advice is to probe the harness of the 2nd sensor with a DVM before monkeying with the exhaust. That will document a baseline for later, when you can install the necessary electronics directly into the harness and nix the 2nd sensor, catalyst and boss altogether. Thats only if you live in the right state, cuz youll still need to pass inspection. Thats one thing I love about Floida no vehicle inspections at all!