The O2 sensor has to be deactivated or it will just over ride the PCIII map by automatically tweaking the ECU.
There is only one sensor, if you look at the exhaust pipe where it comes down to a single pipe, (near to where your right heel would be on the foot rest) you will see it sticking out of the exhaust, it's just small a metal screw in insert with wiring coming out. Just leave it be, if you replace the end cans only you don't need to worry about it. Once you get the PCIII on just disconnect the wiring that runs from the O2 sensor by taking off the belly pan and follow the wires until you get to the plastic connectors, just unclip both and make sure they are safely taped out of the way. Because you have disconnected the sensor wiring a fault warning light will illuminate on the dash, this is why you then need to disable the trigger wire which goes into the ECU. This is a bit more fiddly. With your PCIII you will get a diagram showing which wire needs to be disconnected, it depends upon how old your bike is, on mine it was a black & white wire (K7 model), triple check you have identified the correct one though! As I said before I struggled to get the wire out of the ECU connector on mine so I had to cut the wire. I basically removed some of the PVC tape covering the wiring loom close to the ECU connector so I could get better access and cut the wire mid point so I could just solder on a bullet connector in case I want to revert back to the stock set up. It was all re-taped afterwards and looks fine. It's very fiddly unless you want to start removing the rear body / seat panels. If you can identify this feeder wire further back down the loom, or extend the wiring close to the ECU connector you will get a toggle switch in somewhere if you wanted.
The TRE won't have any effect on the O2 sensor, it just overrides electronic limiters which reduce top end power in certain gears.
