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It does affect emissions, but not in a way that it will throw any codes or anything. Engines tend to run a little cleaner around 210*. Running at 160* will not harm the engine in anyway. It will allow it to run cooler, which is always easier on things that move.
The two theories I've always heard that allowed this to make more power were
1) The engine ran cooler, therefore the intake charge was cooler and denser, making more power.
2) The metal doesn't expand quite as much, allowing the engine to run a little "looser" and freeing up power by reducing friction.
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