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That is not a huge problem at all. The exhaust manifold is the part the comes off the back of the cylinder head on the side of the engine facing the front of the car in this case that exhausts (coincidentally) the gases from your engine and connects to the muffler system. The manifold is probably crack on number four which is in America the drivers side (Left hand) part of the manifold. You can have it welded but it is normally easier to but a new set of extractors or a used manifold off another mr2 or a corolla (any fwd 4age car will do, the mr2 has a fwd setup in the back). It shouldn't cost much as it is an easy job. It won't harm your engine it is just annoying and means exhaust gases can possibly circulate into the cabin but it is just annoying more than anything.
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