i was considering doing this only cause my exhaust is powder coated and flakes in a couple places. mostly at exhuast ports.

X2 So coated exhausts make the engine run hotter too? I don't think so!

I did this when I was running my Bassani pipe, it cooled it down a lot , the heat shields were a tight fit but went back on

I have the D&D Fatcat, the rear pipe sticks out enough to be very close to my leg when stopped. I tried wrapping it under the heatshield, it made it more tolerable on my leg.

Coated exhaust does not have any insulating quality, so no, coated exhaust will not make things hotter. While much of the heat generated from the motor is dealt with through the engine fins, exhaust also serves to help dissipate engine heat. Insulating the pipe increases the heat in the pipe which inhibits the exhausts ability to help dissipate engine heat. While there are advantages to wrapping exhaust, cooler for the rider and some performance benefits, the down sides are hotter engine and exhaust temps. In the old days before EFI and the lean fuel conditions of todays twins it was not an issue, and in fact, wrapping pipes was shown to have added TQ. If you have a tuner, like PV, that allows you to see head temps, you will see the temps will be higher with wrapped pipes. Todays EFI engines generate way too high exhaust temps as it is without adding heat by wrapping the pipes. The other downside is wrapped pipes smell, steam when they are wet and significantly reduce the life of your pipes. Some stock pipes, or poorer quality aftermarket pipes, have been known to crack at or near the exhaust port and they just plain deteriorate because of the constant high temps in the pipes themselves, particularly if the wrapping gets wet frequently. So, if you want to look cool and be cool, go for it. But there's no free lunch, there are downsides.

Ceramic is a thermal barrier, so it is an insulation of sorts, particularly when used on the inside and the outside. On the inside it prevents a lot of heat from transfering to the pipe, then on the outside it lowers the surface temp of the pipe. Any external only coating or wrap "insulates" or keeps more heat in the pipe base metal, and does create significant thermal stress for the pipe material, but keeping the pipe hotter, keeps the exhaust gas hotter, and hotter gas travles faster with less resistance, so it atually removes heat from the engine faster. Wrapping, coating, or otherwise "insulating" the exhaust does not make the engine hotter.

I'd do one or the other but not both.

Interesting. I'm putting together an exhaust system right now. Some of it pretty custom. I purchased some wrap for a 2" section to keep two pieces of pipe from touching. Really just as a barrier to prevent possible rattling. Now I have a bunch of wrap and nothing to do with it, so I starting thinking of wrapping my exhaust under the shields. Seems more think this is a bad idea than a good idea.

Here is something no one has mentioned: What about wrapping only part of the exhaust? What if you wrapped a 6" section that is closest to your leg to keep the heat away from your leg? Could this be helpful without adverse affects?