I have a similar set up on my 2000 SC1. I did not have to insulate the airbox. I monitor the IAT with a scangauge. I normally see temps around 165º to 185º. Those temps occur after 20~25 minutes of my normal commuting, 60%"city" driving.
PS: Thriftee - there is another person doing a blend door setup on another site. Search for "cheapybob" ;>)