There has to be oxygen here for this stage to work, so some cats use a sort of air pump to direct oxygen into the process; others are just embedded with the element cerium, which chemically stores oxygen. This is more common today. Cerium stores oxygen during lean conditions and emits it during rich ones. This is important because for a cat to work right, it has to be able to deal with both rich and lean conditions. A rich exhaust is necessary for reducing nitrogen oxides, but you can't oxidize hydrocarbons and carbon monoxide unless things are lean - that's why it's good to get a cat as hot as possible prior to an emissions test. There's no denying the fact that catalytic converters prohibit optimal exhaust flow. This is especially a problem on turbocharged vehicles with performance that hinges on exhaust volume. There are many aftermarket cats offered that flow almost as well as eliminating the cat altogether - almost. Before removing a cat in lieu of a straight pipe and risk a hefty fine though, it'd be wise to look into a high-flow aftermarket unit first. If not for the sake of our clean air, do it for your wallet; no-cat fines can easily reach two grand in states like California.
PCV Valve:As piston rings inevitably wear, gases formed in the combustion chamber make their way into the crankcase - where you keep your rods and crankshaft. For the engine to function properly, these gases have to go somewhere else. If you look at the small block under the hood of your grandpa's old truck, you'll likely find one or two vent tubes exiting the block. This gets the job done at the expense of a bit of pollution. Newer cars use PCV (positive crankcase ventilation) valves to reduce these under-hood evaporative emissions. PCV valves are one-way check valves that use manifold vacuum to suck the junk out of the crankcase and into the manifold for reentry into the combustion chamber. To keep the engine from imploding, a fresh air source is also plumbed into the crankcase usually taken from the intake stream. But when blow-by gets out of hand, gases and oil can flow the wrong way, up the intake hose and into the intake stream and air filter. This signals either a damaged PCV valve or failed piston oil rings. Typically, an engine will benefit little, performance-wise, from eliminating the PCV system and running an external breather tank. Cases where it might marginally improve performance include high-compression, naturally aspirated engines that use low-tension oil rings or engines that exhibit poor ring sealing and a lot of blow-by in the first place. In both of these situations a significant amount of oil will inevitably enter the combustion chamber, effectively lowering the octane and increasing the chances of detonation. Turbocharged and supercharged applications can be even worse but because of a different reason. When an engine produces positive pressure in the intake manifold and positive pressure in the crankcase, blow-by is forced backwards into the intake stream - not the combustion chamber. In this case, it's not doing its job anymore, and with the added crankcase pressure, the potential for blown seals and oil leaks increases. Engines like these will benefit from some other type of crankcase ventilation system, like your grandpa's truck. But generally you'll find little or no horsepower gains from removing the PCV system on a normal vehicle, and besides, it's illegal - even if you live in the Midwest.