There are two aspects of insulation that you need to think about:
– the gearbox (and motor, if integral rather than mounted on some form of drive shaft)
– the DCC chip itself.
You may not need to insulate the gearbox if you are using conventional pickups, and everything is fairly fimly fixed. However I have recently followed the 2FS route, and other 4mm modellers and started building split frame chassis to give improved pickup and reduce fiddling with bits of bent wire. With a floating gearbox as a result of CSB suspension, there was a risk that the gearbox could contact the insides of the frames, particularly on curves.
As a result, I found that the easiest way to insulate the gearbox was to position a Rizla cigarette paper against the gearbox side, and flood it with cyano to fix it. Once it had set, it was easily trimmed to size with a scalpel.
For the DCC chip itself, I insulate it with heat-shrink tube, rather than insulation tape. It’s cleaner and more convenient, IMHO. I had some previously, but picked up a lifetime’s supply from Maplin in their closure sale…
Unfortunately the EMGS Q&A doesn’t seem to allow the posting of images to show these. However I’ll post them onto the Scalefour Society Forum and provide the links here.