http://www.xt660.com/showthread.php?...light=blocking
Have a look here, might be able to help.
Basically, the AIS is a little valve that when you back off the throttle, opens and lets cold air straight into the exhaust. Because of this, any unburnt fuel in the exhaust will burn up quickly causing a backfire. With the standard exhausts, you don't hear it so much because they muffle the sound, but when you fit aftermarket exhausts you can seriously notice it.
As for damage, no, its perfectly normal and is what the bike is designed to do. If however, yuo don't want to attract extra attention from the coppers from a backfiring bike (which can be quite loud!) then block the AIS off.
Enjoy your shiny new bike