you just need to convince the system that the airbag is still there even though you take it off.. its easily done by putting an appropriate resistor in there, this will mimic the resistance the airbag would normally produce when a check is done when you first start up, and hence the light will go out.
a resistor is the better method than taking the bulb out as when mot time comes the airbag light has to light then go out to pass the test.
heres a vid i made on my channel explaining the process. http://youtu.be/abZqHPzObf0?list=UU4LUIUJ-hL7tZP6p5WWjxjw
heres a night pic of my Kode wheel, and as others have said if feels real good in the hand,
yes you do, in fact nowdays,any change at all you are best telling them, imo if you are modding it is always best to insure with a specialist insurer, its cheaper with them than you think.