A layer of felt paper does not provide significant insulation value.
What it does provide is protection from the wind / drafts. Which is what sealing all holes, etc does.
I find it easier to put a single wrap of felt paper around the hive and be done with it, then try and seal all of the potential draft points.
Also, the black felt does add warmth to the hive on sunny days, which allows the cluster to relax and get to stores.
But, as with anything there are many opions on this topic. If you have a few hives you may want to expirement for yourself.
Wrap one hive and compare it to an unwrapped hive on sunny days and see if there is a difference in the hive's ablity to move to get stores.
For the $20 a roll cost of felt paper, it is cheap compared to losing just one colony.
[This message has been edited by MountainCamp (edited December 06, 2003).]