"DA" wrote in message

there is at least
6-7 feet of bare copper pipes (before they enter the walls) in this first
floor closet. The closet gets cold in winter. Not too much, but I think
60F degrees is probably what it stays at for couple of months. I wonder if
it adds to our poor heater performance?

The water in the pipes will cool, but the heat it gives off help heat the
closet. It is not a "loss", but used as part of the home heating.

Do you think water can loose much
temperature going through 6-7 feet of copper pipes?

No, not much t all.


What materials one
uses to insulate the pipes?

You can buy insulation material for pipes at any home improvement store.

And, lastly, should the heater itself be
wrapped into some sort of a thermal insulation blanket to improve its
performance?

Older heaters are helped a lot. Newer heaters have pretty good insulation.