What does this do?
 

So, I have intake, headers, exhaust on my 86 gsr, but no other performance mods. Everyone says the next step is a high flow cat. I guess I have 2 questions:

1: Does a high flow cat make you gain hp and torque? I heard it reduces horsepower cuz of loss of back pressure.

2: If a high flow cat increases horsepower, should I buy a carsound, or just go to a junkyard, buy an old cat off an integra, and gut it? Would THAT be too little back pressure?

Do yourself and everyone around you a favor and get a high flow cat instead of gutting one or getting a test pipe. It makes more high rpm power due to letting the exhaust flow more freely, however with only a few mods you won't get too much out of one.

So, another two questions:

1) will a gutted cat sounds like bees?
2) if a high flow cat isn't worth it, what is?

Yes a gutted cat will sound like bees.
I never said a high flow cat wasn't worth it, but you'd see bigger gains with a more modified engine. With only I/H/E, you won't get too much out of one. But with cams, higher compression, FI, etc, you will get lots out of it.