I've done a couple without wrapping, and now 4 or 5 with the wrapping (known as the Texas Crutch).
http://amazingribs.com/tips_and_tech...as_crutch.html
Wrapping tightly in foil (with a little liquid added in) really boosts the moisture and tenderness of the meat.
But the biggest reason is for a much faster cook time. The last butt I did without wrapping that was about the same size took about 12 hours to reach 200. With wrapping, it's about 8 hours. This one went from 150F up to 203F in 2.5 hours in the foil.
It's also awesome because it catches a lot of juice in the foil, which I re-add to the pan of meat after pulling.
The only downside to wrapping it is that it softens the bark.
I do the texas crutch on brisket as well. The first one I did without it, I watched the temp hit 150F and stay right there for next couple hours even though the smoker was 250F. I thought my thought my digital thermometer was broken. This is known as the "stall", and is caused by moisture being driven out of the meat, and evaporating off the surface, which cools the meat. Wrapping it tightly in foil prevents the evaporation, so no stall.