Originally Posted by hustler
Why aren't you grounding it on the engine and following the instructions?
Just as a point of reference (it's probably unrelated to this issue) it is generally better to ground the controller of a wideband sensor to a point as near as possible to the ECU. In the case of a traditional megasquirt, I recommend actually connecting the wideband's ground directly to the DB-37 connector. In the case of a Plug-n-play, splicing into the ananlog ground wire of the harness (at a point near the ECU connector) is recommended.
You'd be correct in observing that this is not the "best" ground in the car with respect to establishing a low-resistance path to the engine. Obviously running a direct wire to the head would accomplish that.
However, you have to consider that during operation, there is a fair amount of current going down the the ECU's ground wiring, and thus there is likely to be some miniscule voltage developed across the ground wire. Thus, the ECU will perceive "ground" to be a few millivolts higher than it actually is.
Now, if the ECU is receiving an analog signal from another device which is grounded separately, then the difference in potential of those two grounds (from the point of view of the devices) will show up as an offset in the analog signal between them, causing an error in the reading of the signal.
By grounding the wideband sensor at the ECU, any change in ground potential from the ECU's point of view will also be "seen" by the wideband controller, and thus no imbalance will exist.