Hey, I was experiencing the same thing with my rav4. Mine is a 2000 and conforms to california emissions. YOu can check my post here for some other information.
I basically bought a new a/f sensor and replaced it. So far the light hasn't come back on (knock on wood). The new sensor cost me $170, dealer wanted $270 and the slotted socket you need to change it with cost me $11. Im not sure how much dealer would charge for labor to change it. Im guessing with new sensor it would probably be over $300. Im not sure if its a danger to the vehicle, but if the light is coming on i would change it. I waited till i got some cash to buy the sensor. But check out the topic i posted to see if your rav conforms to california emissions.