That exhaust is what we refer to as "bone stock"
The bike runs very nice in the stock formation. If you ever decide you want more sound (or just a deeper sound) you can start with drilling the exhaust, then move on to removing the baffles completely, and then using a slip-on muffler, and finally replacing the exhaust completely. Or just jump to a complete new exhaust. No reason to spend a lot either, just watch ebay and craigslist for a nice set of pipes that were too loud or too quite for the previous owner and for about $250 you've got new pipes.
If you then decide you want a bit more performance, look to replacing the stock air intake (very restrictive to meet emissions). For about $100 (buy-your-own parts) or $150 for a kit (google chubby air PODS) you can move to POD filters and see a world of improvement.
With either mod, you'll need to rejet - figure $20 for jets and either a few hours to do it yourself, or $200 +/- for a shop to do it for you.
At the very least, find the vstar 1100 wiki knowledge base and start reading - great info. Make sure you thank Sick Mick for making it happen when the original knowledge base was at risk of being lost.