If your cat is glowing red, it's either plugged, which your new one can't be or you are running rich. If the computer told you the O2 sensor then something is up with it. I would guess that the O2 sensor is bad and is reading extremely lean. Not only did it set a code, it's causing the fuel mixture to go rich, and rich will cause a glowing cat. If you've got an exhaust leak, that will cause the O2 to read lean and appear to make the O2 look bad.

97 Wrangler Sport, 31" BFG All Terrain, .30 over 4.0L w/ Comp cam, P&P Head, Banks Header, Throttle body, chip.