You really only need to insulate the feed from boiler to engine, there's no need to bother with any other steam pipes unless you like the appearance. I use a method demonstrated to me by the late John Woodrooffe of Cheddar Models, use fairly thick white parcel string, and attach one end with a dab of superglue. Then wind the string carefully along the pipe, anchoring with another blob of superglue at the other end, and that's all there is to it, no intermediate fixing needed, and it's all that Cheddar ever did on any of their engines. I've got ten year old examples that are as good today as when they were first done, and the only change is a quite pleasing darkening of the string at the hotter end. I've seen very few examples where anything like paint was applied to the string, I'd say it would reduce the insulating properties, and make it a pain if you wanted to replace the insulation. I've never heard of that plaster of paris method, but it sounds very messy and rather a bad idea to me.