I 'm sure it would quieten things down as well. All that oil would deaden the sound and I've always thought that that was where most of the racket comes from. After re-thinking my thoughts though, I realize that the "pucks" would soak up the oil and the bike would not move. The clutch plates on a real bike are not made from a sponge-like material.
I would encourage easyrider to think about this though. He would have nothing at all to lose, he just needs to come up with a better material. If things don't work out it's just a matter of cleaning things up and replacing his pucks.