I have not installed the DSP yet. Will the DSP make much difference
for AM listening?


Maybe. For my use, when listening to the AM band, most of the time a good loop
antenna or a phased array of antennas does far more for killing noise and
nulling unwanted stations than any DSP could hope to do... BUT... sometimes the
mild (conservative) use of the DSP noise reduction CAN help get rid of the last
bits of unwanted noise after I've done what I can with the antenna and other
settings.
Icom's DSP unit (UT106) also has an automatic notch filter which works very
well, killing whistling and whining which comes from two or more stations
bashing into each other on the same frequency. Without the UT106, the notch
feature is inoperable. But that notch filter on the DSP unit does WONDERS on
crowded amateur and int'l broadcast bands. I use that feature quite a bit, and
it's only available with the UT106 installed.
Bottom line is, if you already have the DSP unit, it's easy to install (no
soldering, just a few turns with a screwdriver) and you might as well have it
there, ready for those times when you DO need it. If you don't already have it
at hand, you may wish to do a good bit of AM listening first, to see if you
need anything more. I'd say install it, or if you're not comfortable doing it
yourself, find someone you trust to do it for you.