technically, wrapping the header pipe should boost performance, but only a slight amount it will keep head cooler mostly, I did the header on my ninja and it kept it a lot cooler but no very noticible gains
I would say just sand it down and paint it with some heat resistant paint. I've heard of header wrap collecting and holding moisture so that it rusts the pipe even more.
I heat painted my stock pipe and it looks brand new........make sure you really wire brush the **** out of it first before ya paint, get ahold of a power grinder brush, it cleans up in no time. Also put a good three to four coats on to allow for smoked off loss and color tinting. I went with white.