BZP, my jury is still out on wrapping exhaust pipes. I've seen some racers do it, others not. I tried it on a set of 4-2-1 headers on my 84 Jetta, and it seemed to weaken the metal. Broke them at the weld joints. Weakening was also a complaint I read somewhere on the Internet (so it's gotta be true!).
[edit] Found it!
http://www.centuryperformance.com/ex...o-not-use.html but this was in reference to headers. I do have fiberglass wrap around my exhaust manifolds to try to keep engine bay heat down. I figure the metal is pretty thick there so I shouldn't have to worry much.