99 Corolla Catalytic Converter Code P0420

Driving the vehicle with a bad catalytic converter will not harm the vehicle and will not cause drivability problems unless the converter is clogged internally, which is probably not the case since you say that the car is running fine.

There is no reason mechanically to be in a big hurry, however, your car is obviously putting out more pollutants than it should be so you're not doing air quality a big favor. You will need to have the vehicle repaired, or at least have the check engine light off, before you take the vehicle in for an emissions test.

It seems to me that a lot of people have issue with P0420. Should CAT maybe plus O2 sensors last lifetime of cars, at least theoretically speaking?

In theory, the catalyst in a catalytic converter should last for a vehicle's lifetime but I think that they are a weak point in that vintage Corollas, which is why I suggested that it might be bad in your car. I would hold on to my catalytic converter receipts because I would not be surprised if a recall came up on those in the next year or two.

I do not consider O2 sensors to be a lifetime item. In fact, I seem to recall that they require replacement in some vehicles every 60,000 miles.

As long as the OBD II system does not have any trouble codes stored in memory and the system shows as "ready," the vehicle should pass the emissions part of the test.