The exhaust system is very important for a couple reasons. First it safely removes the toxic gases created by the combustion of the engine. Secondly, it monitors the gases created by the engine via sensors that feedback information to the engine control module for proper fuel delivery. If the system leaks due to a gasket failure, rusted muffler, or damage due to an accident it needs to be repaired immediately. The leaking gases can enter the passenger compartment and will put the opponents to sleep and they may not even smell the gases. As for the engine the leak will give the sensors a false reading and the engine controller will not deliver the proper fuel mix. Fuel mileage will decrease and the added carbons will damage other systems.
The catalytic converter has been on US built cars and light trucks since the mid 1970's. The purpose of the catalytic converter is to reduce the exhaust emissions of the internal combustion engine. The internal construction of the converter consist of a ceramic beeswax style honeycomb. This honeycomb is coated with platinum-iridium catalyst. The exhaust system gases cause the catalytic converter to reach extremely high temperatures. As the carbon monoxide enters the chamber of the catalytic converter it is oxidized. In 1996 automobile manufactures in the US were required to add a sensor known as the down stream O2 sensor. The purpose of this sensor is to monitor the exhaust gas and insure it is being oxidized to an acceptable level.