IMO the cat doesnt restrict enough airflow(unless boosted)to really make any kind of diffrence. The only reason i say that is because i removed mine and only noticed two things, one the exhaust tip now gets EXTREAMLY hot, dont get me wrong, it got hot before but now if you barely touch it, it will burn you(no i didnt reach down with my hand, i was sitting on the trunk and my leg touched it like it has so many times before but this time it burned me right through my pants leg), and two my exhaust was ALOT louder. But one thing i didnt notice was a power increase, the car didnt seem any faster or any slower.

Bottom line if the cat going bad(and you dont have emissions) just leave it out. It certianly wont hurt the car as long as you do what Maukio said. And i believe if you have a 94-95 you should only have one O2 sensor anyway, so then it really doesnt matter.