Jon, I'm not the builder, so I may not have the best answers for you. I'm sure any questions or comments would be very welcome at Kirk's (donkey) site. I believe idea was to provide a better looking surface and to protect from little ones getting to the hot barrel. The air gap is open on the bottom and top and
should provide a convection current of hot air.
If I understand your question, insulating the outer barrel will not provide the heat extraction necessary for these things to function.
As for Erica's contest, I haven't seen anything new lately.