Copied from a post on the Hilux Surf Forum
Exhaust gas recirculation (EGR) systems were introduced in the early '70s to reduce an exhaust emission that was not being cleaned by the other smog controls.
Oxides of nitrogen (NOx) are formed when temperatures in the combustion chamber get too hot. At 2500 degrees Fahrenheit or hotter, the nitrogen and oxygen in the combustion chamber can chemically combine to form nitrous oxides, which, when combined with hydrocarbons (HCs) and the presence of sunlight, produces an ugly haze in our skies known commonly as smog.
So basically it recirculates some of the exhaust gases back in to the block to reduce NOx. It says in doing this it reduces the operating temperature of the block, I have read many many articles on this topic. Some written by the Green/environment people who advocate you should never disconnect the EGR because of the detremental effects it has on your engine, of course they would, nothing to do with the environment of course. Some by Profs. of motor mechanics, who don't deny in disconnecting the valve it raises the NOx levels released to atmosphere (our MOT laws in England don't test for NOx). They also claim that lowering the operating temperature is not a bad thing except the recirculated gases cause hot spots and on cast heads thats not good. The recirculated gases are reintroduced into the block on one side, so cooling that area not the far side of the engine, one side hotter than the other.
The other down side of the EGR is, in reintroducing the gases back in to the engine, this will place an even greater demand on engine oil performance through increased soot generation and acid levels. So you need to make sure regular oil changes are strictly adhered to.
The EGR also comes with another downside slight loss of power and decreased MPG.
The very early valves (like on the early surfs) were single diaphram valves that open on positve pressure (some open on negative pressure) these early valves entailed a mass of vacuum hoses within the engine bay. They were not that reliable, hoses can rot, split, the diaphram within the valve can perish, become perforated. All this leads to a non or poorly operational valve.
This system had many problems. It would often open to much, which caused a hesitation on acceleration as massive amounts of recirculated exhaust hit the combustion chamber. The peak temperature NOx is produced at only occurs when the engine is under full load, not all the time so with older style valves it recirculated all the time.
The newer valves are controlled by solonoids, so control the recirculation better only reintroducing the gases when the engine is under full load. So are more reliable don't effect performance so much or the MPG.
I have disconnected my EGR, I personally noticed more low down torque on my surf and better MPG. Yes my head has cracked 1 year after I got the motor and 10 months after disconnecting the EGR.
There are some who's heads have cracked and have never disconnected the EGR.
After replacing my head I reconnected the EGR for three weeks. Its diconnected again, couldn't stand the smoke it throws out the exhaust, the less grunt on acceleration and the worse MPG.
I hope this answers your question with an unbiased opinion, there are the greens who write articles on the EGR saying how great it is and mechanics who write articles saying the early valves were poor.
Thats the info, you make up your own mind.