A waterlock muffler works by pooling the water in the bottom, so that the incoming exhaust gas bubbles through it, then forcing the water up and out through the upper chamber. They are quiet because the exhaust goes through the water to get out.
They have some back pressure, despite what Vetus says, and are normally used with diesels on sailboats. On a gas engine, they will probably not give the power that the usual baffle-and-sound-absorber muffler will, but only a real gearhead can tell you if it makes any difference. On most sailboats, the engine is mounted at or below the waterline, and a waterlock is mandatory. On our boats, the exhaust is usually sloped from the engine back to the transom so that all the water drains out when not in use, as I understand it.
If you use the waterlocks, make sure that they are the lowest point in the exhaust system, since they accumulate water to operate, about 60 pounds of it in each waterlock! If you decide not to use them, contact me. I might be able to use them since I happen to have diesels with 3" exhaust....
1975 32' Flybridge Sedan, twin Perkins 6-354 diesels, 1:1.53 velvetdrives, 16 X 19 props. Merritt Island, Florida