Zoning regulations rarely fall in favor of the racer. As suburban areas take up space, these areas are running right up against the boundaries of long-established racing facilities. The fact that the racers were there first matters little when new, more restrictive zoning ordinances are passed. The only option for track operators and racers in many cases is to quiet down or shut down
Fortunately, as long as the ordinance is reasonable, it isn't all that hard to do. The most common maximum noise level agreed upon is 95 to 100 decibels at 100 feet. For a V-8 race car, that isn't hard to exceed under full throttle, but with the proper muffler installed, you can get under those limits without killing your power. The key is to minimize backpressure, which can harm the efficient flow of air and fuel into the combustion chambers.
Backpressure is created when a muffler (or anything else) impedes the flow of the burnt air/fuel gasses out of the exhaust pipe. For this story, though, we will consider only the role of the muffler. A restrictive muffler creates higher pressure in the exhaust pipes from the muffler inlet all the way to the exhaust valve. A naturally aspirated engine moves air and fuel through the system by taking advantage of the atmosphere's tendency to flow from high-pressure areas to low, so this increase in pressure in the exhaust path reduces the amount of burnt gasses that can flow from the combustion chamber into the exhaust plumbing. You can see where this is leading-a combustion chamber that isn't completely evacuated means there is less room for the incoming air/fuel charge, and because the already burnt by-products of combustion don't tend to burn a second time, overall engine performance is lowered.
For many of us, running an unmuffled exhaust system is no longer an option, but that doesn't mean you have to live with tons of backpressure clogging your engine. Modern muffler designs specific for racing can achieve good results when it comes to reducing noise levels without harming power levels. The key is that the greatest part of an engine's noise is created not by the "explosion" caused by burning fuel in the combustion chamber, but by the pressure wave created when the exhaust valve first opens and high-pressure exhaust gasses come rushing out at supersonic speeds. This is why a high-compression racing engine sounds louder than an unmuffled street engine. If the energy in those waves can be reduced before they reach the open atmosphere-either by disrupting them or splitting them into smaller waves-the quality of the sound can be changed or even reduced.
Currently, muffler designs can be broken down into two categories, depending on how they go about dampening the pressure waves that create sound. The most common design is probably the baffled muffler. This uses a series of pipes or dams that force the exhaust gasses through a tortuous route through the muffler casing before exit. These turns force the pressure waves to bend and bounce off each other, which dissipates each wave's energy.
The second design is commonly referred to as a straight pipe, which means there are no obstructions in the flow path. A straight-pipe muffler reduces noise by using a perforated tube, and in some cases a packing material around that, to absorb and break up the pressure waves as they travel through the muffler. The concept is similar to that of adding carpet and heavy curtains to a room to make it a "quieter" environment.
Both designs are effective if the muffler is properly built and matches the engine's needs, and neither has a clear-cut advantage over the other. If you aren't required to run a spec muffler, several companies have good muffler options to best fit your needs.