Okay to put transformer inside enclosure with the effect?

[Chris Goodson]

I'm currently building a Neovibe and I found a small 14VAC transformer in my junk box I think would work well for it.  I thought it would be nice just to mount it inside the enclosure with the effect.

Is this a bad idea?

Is there anything important I need to know about doing this to prevent hum?

[Mark Hammer]

If it was a catastrophic idea to put transformers inside of chassis then there is a long lineup of famous pedals that never would have seen the light of day.

Nonetheless, many companies use a wall wart to power pedals and this obviously creates an impression that on-board trannies are somehow too problematic.

On-board transformers are fine, but create the need for more space (not just for the tranny itself but the filter caps, etc.), mounting hardware, thicker power cords, and a whole bunch of things that create additional production costs, partly by virtue of bigger package and assembly costs.  Far easier and cheaper to just contract out for a suitable wall wart and concentrate on the circuit itself.

The EE types here have a lot more to contribute with respect to design here, but certainly things you need to do within any pedal package that has an on-board transformer are:

a) Make absolutely sure there are no risks of high voltage exposure, since you effectively have a wall socket directly connected to your box.

b) Place the transformer as far away from the audio portion of the circuit as is physically possible in the chassis, and that also means not running input or output jacks near the transformer.  
c) Certainly if you can't space the transformer away from everything, make sure the highest gain or circuit portions most sensitive to external interference are furthest away.

d) Use big ground planes where you can and need to, use shielded leads where feasible, and if you can mount a ground shield around the transformer, do so.  That could be as simply as a piece of copper shim or sheet aluminum bent at right angle like a vertical fin, and placed between the transformer and remainder of the circuit.

e) Regulate it well.

f) If you can score a toroidal or already well-shielded transformer, take advantage of the lower interference these things produce.