Ive done Both, in some cases I have not wrapped in foil, sometimes with no probs, and others with probs.
If you wrap them in foil and poke holes in the end you can control the quality of smoke more.
If you just lay them in the pan wet, they will smoke good for awhile but once they start to dry out, if the air mix is just right they tend to go from smoldering to flaming, not good, too dirty of smoke causing creasote to contaminate the meat.
try to remember... Thin blue smoke....
hope this helps