So I always see in catalogs this turbo insulating kit, that's some kind of heat reflecting blanket/wrap that goes onto your turbo. I could see how it would help keep heat away from nearby things in the engine bay, but are there any other benefits/downsides to doing this? The description says it will "keep the turbo spooled up; it virtually eliminates turbo lag", but I'm unclear how it would do that, unless it's the same concept as header wrap. But would keeping the heat in the turbo contribute to greater wear or oil coking?

 

yeah... virtually, not literally.

Blankets do aid in keeping heat out, but they also aid in weakening and deteriorating the metal.

 

Very much the same way header wrap does headers and hence why most header manufacturers say it voids their warranties.