[brucepick]

My thought in insulating the valve cover was to put the insulation as close as possible to the mass whose heat is to be preserved. A small amount of insulation wrapped over the valve cover seems to do a good job of conserving the heat.

Insulating further out from the engine can also help. But keep in mind that the further out you put the insulation, the more the heat energy will disperse before the insulation traps it.

However because you can't (I believe) insulate the whole engine, there is potential gain in insulating the hood or engine bay, and maybe even insulating outside the car as pete c suggested above.