I have purchased halogen 4" non-ic lighting. I've come up with the novel idea of covering them with 10" clay pots to insulate and keep insulation off the housing. Anyone have an opinion? Question of the day, "Wht even make Non-IC lights at all? Where can you use them except in-between floors on a two story house. Oh brother.....
You answered your own question. You use IC lights in an insulated ceiling and a non-IC light everywhere else. You can use an IC light everywhere else too but it is a waste of money.
Insulation contact (IC) lights are designed to be air-tight so that it doesn't leak warm, moist air from the house into the cold attic and condense into water in the winter. If you live in Florida you won't have this problem but if you live in a cold climate, you will. They tie into the vapour barrier of the house in new construction.
They are more expensive than their non-IC counterparts. Most IC potlights nowadays already come in a big metallic box that can be buried in blown-in insulation. Read the manufacturers instructions including the approved trims that go with the can. Enclosed trims like a shower light usually specify a lower wattage bulb. Local inspector may also have their own requirements.
There are some "retrofit" IC potlights that can be in direct contact with insulation.
http://www.cooperindustries.com/content/dam/public/lighting/products/documents/halo/spec_sheets/adv042450_ei700rat.pdf It's really not worth the hassle to make a non-IC potlight suitable for use in an insulated ceiling.
All quality potlights have temperature sensors whether they are IC or non-IC. It's a fire protection issue. The only time I have ever had problems with the temperature sensor constantly turning the light off was when the ceiling was spray foamed. The spray foam was TOO good at insulating so it retained too much heat in the can. If I have to foam a ceiling, I wrap the light in fiberglass insulation to keep the foam off the potlights.