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It's been my experience, and I'm sure ClieOS can correct me if I'm wrong, that the farther in your ear the IEM goes, the better the isolation. IEMs like those from Westone that barely go in your ear canal really don't isolate that well.
Deep insertion generally does improve isolation, but a major contributor of isolation is simply the material and design of the IEM housing. Westone actually can be inserted into the canal deeply and does provide very good isolation.