You don't need them, but they're good for a substantial power increase on forced induction applications. Exhaust scavenging is even more important on forced induction applications than on a naturally aspirated combination. In layman's terms, the cylinder needs to be as thouroughly evacuated as possible in order for the blower to fill the cylinder as completely as possible. As a result, you'll typically lose about a pound of boost, even though you're making moer power. The nice side result is that you can pulley down to more boost and make even more power. Typical results on f-body applications with mild blower setups show that shorties on these cars produce around 50 horsepower or more BEFORE pulleying down to more boost (results are typicl of LT1 f-bodies, NOT s-10s).
As far a losing the cat or not, there is just no such thing as too little backpressure on a well designed exhaust system. Let me say that again. THERE IS NO SUCH THING AS TOO LITTLE BACKPRESSURE ON A WELL DESIGNED EXHAUST SYSTEM. That is to say, if you have a decent set of headers and a good exhaust, there is no power or torque to be lost by getting rid of the restriction. Would I recommend it on a vehicle with stock manifolds? No. But if you have headers and a good exhaust and you can stand the extra noise, then it's in the best interests of power to ditch that cat.
-Chris