The insight with the manual has a different engine than the one with the CVT, it has nothing to do with the transmission itself, which is somewhat of a coincidence (I don't understand why they couldn't sell the lean-burn version with the CVT, or the "clean" engine with the MT for that matter).

The lean burn engine can achieve somewhat better mileage when cruising at steady speed because it lowers the fuel/air ratio under light engine loads, saving a bit of fuel. However, this causes somewhat hotter combustion which I believe creates more Nitrous Oxide compounds in the exhaust than running a stochiometric mixture. Most of this is burned off in a special catalytic converter, but not all. It is only NOx emissions specifically in which the MT Insight is worse than other hybrids. In terms of CO2 emissions though, the manual is still better, because that's directly related to fuel consumption.

Another tradeoff between driving range and emissions with the PZEV rated hybrids is that they have smaller gasoline tank capacities, because they must have special extra containers in them to prevent any emissions from fuel evaporating due to heat expansion as well. I have to admit that being able to go very very long times without stopping for gas is a nice benefit -- I have a ULEV Civic with 13.1 gallon tank, allowing me to go as long as 700 miles without stopping, it's unfortunate most of the new models only come with 11 gallon tanks.