Research from the 1970's proves that wound dressings applied after branch removal do not prevent decay in woody plants. Some even delay development of callus tissue or "woundwood".
The apparent function of wound dressings is cosmetic, perhaps driven by the perception that tree wounds should be treated like human wounds. Some asphalt-based "sealers" are used to keep moisture out of the pruning cut. They often crack and moisture gets in underneath. It is far more important to make a smooth cut outside the branch collar and allow the wound to dry and close naturally without any dressings.
If a wound dressing is desired for aesthetic purposes, use an aerosol spray type to apply a very thin coat. Do not use paints, thick tars or other materials that contain petroleum solvents.
For more information, see the following Colorado State Extension fact sheet(s). http://www.ext.colostate.edu/ptlk/1753.html
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