Are you just outside your warranty period?
If you want to check it yourself, here are some documents taken from http://fsm.afraid.org.
Inspecting the heated Oxygen Sensor (HOS): http://126.96.36.199/FSM/Repair_Manual/...3/hos/insp.pdf
The documents are for 2003 Tacomas, but the inspection procedures should be similar. I think that you might have a HOS in the front (rather than an A/F sensor), so the inspection procedure of the front (bank 1 sensor 1) sensor will be different for you. I do not know if it will be exactly the same as the link I gave you above, but it might just be.
If you trust your dealership, you could have them check the sensors and cats, and you could go buy the parts cheap online. http://www.urdusa.com
sells O2 sensors, and http://www.1sttoyotaparts.com
sells all OEM products. The problem is... the dealership mechanics make too many mistakes, and you might end up replacing something, and not fixing the problem. I don't trust my dealership.
Anyhow, P0420 only means that the cats aren't working properly, and a lot of times, this doesn't cause further damage. If your local DOT enforces smog checks, then it might be an issue that you even have a CEL, as that's a critical criteria.