Don't entertain that thought anymore. That is a bad idea a customer came into the showroom one day In search of an insert. I was going to sell him one until I found out he was doing exactly what you are doing. Taking a manufactured fireplace out and installing the insert. I told him no that's a bad idea don't do it, I won't sell you a unit. He went 15 miles down the road and bought one anyways. First fire he caused 42,000$ in damage to his house. If your going to do this check into a Kozy heat. They are specifically designed for a 0 clearance installation. http://www.kozyheat.com

As far as the flue goes be sure to use a class A chimney. I recommend superpro21 they have a ceramic packed insulation between the inner and outer pipe allowing the pipe to expand and contract between the walls in case of a flue fire. Some company's have a packed insulation made of a cinder or clinker type material in the event of a flue fire the pipe will expand against the clinkers and damage the inside of the pipe.

If your going to install a kozy heat or any zero clearance fireplace insert be sure to get the chimney cleaned annually. Wood inserts are a completely different ballgame compared to a fireplace. You will load it up and knock the air control back so it will burn a long time. In the mornings when you add more wood get the flue gases up to around 900 degreese for 20 minutes or so while your drinking your coffee. Then close it down. What your doing is taking the creosote from the night before and evaporating the moisture out of it. the creosote will dry up, flake off and land on the baffle. I have customers that take my advice and some that do not. The ones that don't I clean the chimney every year the ones that do I only see every few years.

hope this helps