The following is a short article on why to avoid tree wrapping.
Tree wrapping, or wrapping the trunk of young trees after transplanting, is not recommended. In the past, wrapping was done on fall transplants in order to reduce sunscald and frost cracks. However, replicated studies have shown that wraps are not a deterrent to these problems. Wrapping can actually create problems by reducing photosynthesis (because young stems contain chlorophyll), and increasing potential pest attack from borers and certain diseases. The best benefit from wrapping is protection from chewing rodents. For this purpose, it should be in place only during the dormant season.
Information from Steven K. Rettke in the October 10, 2002 edition of the Plant and Pest Advisory, Landscape, Nursery, and Turf Edition from Rutgers University http://njaes.rutgers.edu/pubs/plantandpestadvisory/2002/ln1010.pdf