85 328 Rough Idling

This is a bit of an unusual statement as there is no separate fuel pressure regulator on a K-Jet with Lambda system. The fuel pressure regulator is a subsection built into the fuel distributor -- do you mean you actually rebuilt this subsection of the fuel distributor, or did you replace some other complete component (and just don't have the name quite right)?

This is also a bit unusual statement -- the idle mixture screw should only be adjusted with the O2 sensor unplugged at warm idle. Measure the voltage between the unplugged single O2 sensor wire and ground at warm idle (with the access hole to the adjustment screw closed). By selecting different adjustment positions, you should be able to "swing" the unplugged O2 sensor output at warm idle from lean (say 0.1~0.2V DC) to rich (say ~0.9V DC) with a reasonable warm idle adjustment being ~0.7V DC (i.e., just slightly richer than stochiometric). In this open-loop mode, the voltage won't be super-stable, but if you can't "swing" it from lean to rich and back = that's a very serious problem.

This is normal. The two wire connector is for an internal electrical heater inside the O2 sensor. Once the O2 sensor is "hot" (from either this heater or the exhaust gas), unplugging this electrical heater won't make any difference. If you were at idle for a long, long time (i.e., not a lot of hot exhaust gas flowing), it might mess up the O2 sensor output voltage, but for a short time you won't notice anything different.

With the O2 sensor plugged in, the idle portion of the throttle microswitch should also be electrically closed at warm idle as this "tells" the injection ECU to limit the lean-rich excursions of the frequency valve during idle and limit the surging.

Good Hunting!