I had a turbo setup at one time.  It was a Gale Banks setup on a small block. It made 22 lbs boost, and the manifolds were water cooled. The turbos themselves were not, and the was no water in the exhaust. The turbos were insulated (to keep heat in I guess, as well as provide some sort of heat shield).  The turbos themselves ran white hot, and the heat shields themselves got smokin' hot too. That engine made over 700 horsepower, but wore out quickly.  It would push an A2 impellor to 6000. I rebuilt it once, and sold it.  It was fun, but too costly to maintain.  I wouldn't recommend running a dry system in a boat, it would present an extreme fire hazard with everything glowing. Big blocks will easily make well over 1000.