I have a '97 ATX V6 and my catalytic converter is going bad and was wondering if I could use a SHO-shop or BAT y-pipe as a good replacement. If so which one, and should I paint the convertor or use some kind of heatshield to keep heat away from the oilpan, Thanks.

Check the Search Feature and you'll find tons of results.
But i went with Sho-Shops and had it ceramic coated by Jet Hot. View my web page and you'll see the difference of before and after pics.

The converter isn't very close to the oil pan so painting the cat insn't really necessary. If your concerned with heat from the Ypipe, modify your stock pipe so you can keep the heat shields and benefit from better flow. Here is a modified stock Y which is similar to the SHO Ypipe. The cat is available on-line for about $75.
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I agree the Cat doesn't need to be coated, but why not if your doing the Y-Pipe. huh?
I still believe Sho-Shop has a better setup than the stock one. Minus the heat issue which can be taken care of.

How difficult is it to install a y-pipe yourself? Any welding necessary?

To be honest with you I didn't want any hassels with exhaust leaks and took it to a professional. I think I paid $100 for it and that included welding the pipes in place.
But most have done this themselves with little problems.
I just would use different clamps, Sho Shop supplies you with U-Clamps.