Blow Off Valve (BOV)
(a.k.a. Compressor Bypass Valve)

What does it do:

The purpose of a blow off valve or compressor bypass valve is to prevent large pressure spikes in the intake pipes when the throttle plate is closed while boosting, preventing the turbo from surging.  The BOV sits between the turbo and the throttle body and has a vacuum line that is attached to both the other side of the BOV valve and the intake manifold.  When you are boosting the pressure on both sides of the valve is essentially equal because the pressure in the intake manifold is the same as in the intake pipes.  When you close the throttle plate while boosting all that air slams into the plate and pressure spikes.  At the same time the intake manifold pressure drops to a vacuum, and thus so does the pressure on the other side of the valve.  The result is the valve opens wide to allow the pressure to vent out.  Also included in a good BOV is some form of spring to aid in keeping the valve closed during modulating part throttle situations so that the BOV doesn't open and cause drivability problems.

Why upgrade:

The stock bypass valve in the 2g's is a very weak. The result is that it leaks at boost levels above about 12 psi. The fix then, obviously, is to install a BOV that doesn't leak until higher boost levels. If you don't, anything you do to increase boost will be fruitless. You even run the risk of damaging your turbo by stressing it trying to get higher boost.  

Here is what happens, if you do any mods that increase boost (intake, exhaust, modding stock boost controller, installing after market boost controller, installing larger turbo etc) before upgrading the BOV.  Air is sucked into turbo, compressed, sent to the intercooler, then past the BOV, to the throttle body, into the intake manifold, and into the pistons.  The BOV vents into the intake system BEFORE the turbo which is effectively like venting it outside in this case because it is allowed to expand back to atmospheric pressure.

Now as the turbo spins faster to increase the pressure in the intake pipes beyond the leak point of the stock BOV, pressurized air in the intake pipes leaks past the BOV. The pressure in the intake pipes thus can't reach the point where the boost controller will keep the turbo from spinning faster and limit boost.  So the turbo spins even faster to flow more air to try and get pressure up to the point where the boost controller will start regulating the turbo's flow, but air is still leaking out of the BOV and in fact as pressure increases the BOV opens more and leaks even more.  The end result to this cycle is that either:

a) The turbo will eventually spin fast enough to overcome the leak and get the boost pressure up.  At this point the turbo is running way outside its efficiency curve and is doing little else than pushing very hot air and working hard to do it.  Hot air knocks, detonates, and contains less air mass than the same pressure/volume of air at a cooler temp (remember your physics PV=nRT) and you'll be pissed that your car is slower than a Honda Insight

b) The turbo never really can flow enough air to overcome the leaking BOV, all the steps in a) occur, and your turbo dies an early death. 

Now let me repeat that again:

BEFORE YOU DO ANYTHING WHICH CAN INCREASE BOOST LEVELS YOU MUST INSTALL AN UPGRADED BLOW OFF VALVE.

What to upgrade to:

There are several different alternatives which may be considered. The most popular is to utilize the stock pre-95 BOV (aka 1g BOV). This unit is usually good for up to 22 psi or higher when crushed. To use it you will need either an adaptor to install it on the stock upper intercooler pipe BOV mount, or you will need a new upper IC pipe with a 1g BOV flange. If you are planning on getting a new upper IC pipe (not including the radiator hose mod mentioned in the Upper IC section) then you should get it at the same time you buy the 1g BOV. Otherwise if you get the BOV now you will need an adaptor which will be useless with new upper IC pipe.

Another option is the stock 3000GT BOV. It mounts just like the stock 2g BOV, but in my opinion it is really pointless to even bother with this.  I have yet to talk to anyone who has gotten this mod and not eventually moved on to a point where they end up having to buy another BOV because the 3000GT model can't be used with any aftermarket UIC

You can also get one of the many aftermarket BOVs but for the price they just aren't worth it. Most of the fastest DSMs out there (who don't care about putting name brands on their cars) run the 1g BOV. Many others have tried the aftermarket and found them to just not work as well as the 1g valves. The choice is yours but you will pay top dollar for a part which is marginally better and usually not even as good as the cheaper alternative. Many members have switch from aftermarket BOVs to the 1g.

Ok so you insist on putting in an aftermarket BOV.  Maybe you are hoping to improve the looks.  That is OK if you have the money and at least you are still improving performance.  There are many options out there from HKS, GReddy, Blitz, TurboXS.  Which ever way you go you really should do it such that the purged air is routed back into the intake at the turbo.  This isn't the time to explain the entire working of the engine management system and besides you should do some of that research on your own.  But the long and short of it is this: the ECU measures how much air enters just after the filter and bases how much fuel it injects based on that count.  When you shift, if that counted air is vented to the outside rather than back into the turbo inlet, then the ECU will still inject fuel based on the counted air but with the air now gone the car will run VERY rich between shifts resulting in stumbling.  Some people seem to be able to get away with it but generally it just isn't worth bothering with.  There is no performance benefit and the loss in drivability is not worth making the BOV sound louder.

Another issue which concerns the BOV is crushing. The 1g BOV may be crushed to allow it to hold more boost on the highend and to not leak at part throttle applications. Crushing the BOV, in short, entails placing the BOV in a vice and slowly crushing it (making it shorter not skinnier). The trick is to use a vacuum pump (hand is fine) and gauge and crushing the BOV until it remains closed at about 20 mmHg. So don't just stick it in a vice and crush it 0.x inches. You have to use a vacuum gauge to do it right. If you need more info do an archive search of the Talon Digest Archive Searcher. Search for BOV AND crush.