The only time I've really used liner on duct is duct work that is exposed in an occupied area. That way the owner can blend the duct work in with the decor. It served as thermal insulation though. If the liner doesn't provide the necessary insulation I could see using external insulation if you have the room to do both though.
It is pretty common to internally line round ducts for noise control purposes. People often associate external wrapping of ducts with acoustical benefits, but these benefits are often negligible...I do not know if you can count on internal insulation for thermal insulation.
The simple rule is that: if you want to reduce noise traveling through the ducted system, you will need internal duct lining and/or sound attenuators.
Internal insulation if fine to be substituted in lieu of external thermal insulation. Like anything else it needs to be specified and installed correctly.
I am not a fan of internal insulation unless the duct is large enough for a person to replace it. I know of a high rise building built in the early 70's where the covering over the insulation was disintegrating and being blow out after about 30 years of service. Not a real problem, just annoying bits of the material showing up on top desks from time to time and complaints from occupants when a bit lands on their hair. Way to expensive to fix.
Another thought is that equivalent thermal performance using internal insulation requires ductwork that is correspondingly larger ($$$). There can be condensation issues with only internal insulation, if the corners aren't tightly fitted. How do you get tight corners in a 20'-long section of 12" x 16"?
I agree with DonP., internal creates lots of potential issues down the road.
