High NOx is cause by high combustion temperatures. High combustion temperatures can be caused by a hand full of different scenarios, both mechanical and electrical.
The leading mechanical cause of high NOx is high compression ratio. A high compression ratio takes a (relativly) large amount of air/fuel and compresses and heats it. When the mixture is lit, it burns hotter and faster then a low compression engine. The common solution to this is an EGR. The EGR puts some of the exhaust gas back into the combustion chamber. This, of course, does not physically decrease the compression pressure or temperature, but it does lower the burn temperature buy substituting fuel for an inert gas. The 4.2 comes stock with an EGR. The 4.2 has a C/R of 9.2:1 where the 4.0 has a C/R of 8.8:1, I'm not sure but swapping heads may raise the C/R even higher.
Timing advance is the leading cause of high NOx in the electrical system. The whole point of having advanced ignition timing is get as much of the fuel burnt as reasonably possible to apply the maximum amount of pressure when the piston hits top dead center. It takes roughly 3 millisecond (0.003s) for the fuel to burn from the spark plug to the other side of the combustion chamber. While the fuel is burning, the engine is still turning. if you lite the fuel before TDC, the engine will still be compressing the fuel while it is burning. So not only is the pressure and temperature increasing because the volume is decreasing, but increasing because the fuel is burning. This is perfectly fine for the most part. The piston is near the top of its stroke and has a lot of mechanical advantage over the high pressure on the piston. What this means for the fuel is a high temperature burn, which increases the overall pressure pushing down on the piston.
The net effect is more HP out, but high NOx due to the high temperatures. More applicably to a hot header, ADVANCED timing will lower the exhaust temperature because the fuel is all burnt and a lot of heat and energy was extracted from the power stroke of the engine (increased volume, decreased pressure and temp). Unfortunately there is a limit. If you advance the timing too far, the increasing pressure and temp from the fuel burning combine with the pistons up travel will hit a limit and cause the remaining fuel to spontaneously ignite. You hear this in the form of knocking.
Retarding the timing will cause the spark to go off at or after TDC. Now the piston is on it's downward travel as the fuel burns. The volume is decreasing as the piston moves down lowering temp and press, but the fuel is burning increasing temp and press. There is still plenty of heat and pressure built up from the fuel, but the fuel does not burn as hot as the advanced timing scenario. This will lower the NOx, but will also lower the HP out. Consequently, the header will also be hotter. If the timing is very retarded, there is a good chance the fuel will still be burning in the header.
Unfortunatly, there is no easy solution to your problem, and of the solutions you're going to loose HP.
1. Retard the timing. This probably won't even work. If you are running the 4.0 injection and computer, the timing is controlled by the computer. Even if you rotate the distributor, the computer will compensate until it goes hay wire. If you are running a different EFI, you may be able to retard the timing. This will fix your high NOx, but increase the heat on your header.
2. Install an EGR. This again will fix your high NOx, while not effecting the heat on your header, or slightly lower it. Unfortunately, for CA smog you are not allowed to change the smog control devices on the motor. You could go to a smog ref and explain the whole swap, (you might have already) and get ok'ed for an EGR, but... installing one that works right might be the end of your header.
3. Install a spacer Head gasket to lower the compression. This will fix the NOx issue, but lower HP. It may also stop the header glow. This is a viable option for smog, and all you need to do is change out your stock head gasket for a thicker head gasket. Most machine shops have them available for making up the missing metal from decked blocks and heads.
4. Remove the header. A good header will allow more of the exhaust to leave the combustion chamber then a stock exhaust manifold. Sometimes the left over exhaust acts as a EGR if enough is there. By putting a header on the motor and scavenging more exhaust the combustion temps may have increased.
If it was failing NOx before the header, I'd probably install the spacer head gasket. It should fix the high NOx while leaving the other engine parameters alone, leaving the nice simple EFI system.
If it is failing NOx after the header... pull the header to pass smog.
As for the header glow, I wouldn't worry about it. Headers are usually thinner than the stock manifold. The thinner metal does not resist heat flow as much and tends to run hotter on the outside surface.
