1997 Ford F150 ruff idle after reaching normal engine heat

hi so I am looking at a f-150 for 2500 dollars. it is in mint condition tranny is good, no rust anywhere It looks new and has been sitting a while but is only a 1997 when you start the engine it runs amazing sounds great no knocking sounds ticks or anything really sounds great in good condition. But when it gets up to normal running temp it develops ruff idling and when you rev. it it smokes. He says that he has put a computer reader on to it and it says O2 sensor malfunctioning. When driving tho it runs good with very little smoke. can a o2 sensor cause these symptoms I am going to have the truck taken to get a safety what do you think is the best thing to do and could this be more bigger problems like a blown head gasket? thanks dave I really aspirate this.

John