It is a vacuum operated valve, mounted 5" from the firewall, in the engine compartment, hanging on the heater hoses that go from the engine, to the heater core, on the passenger side.
You can push the valve closed by finger and thumb pressure. Be sure you can push it closed by hand. Then take a piece of vacuum line, and suck on one side, and see if you can operate the valve with vacuum.
If all that works, then check that you have vacuum. The vacuum is switched by an electric vacuum solenoid, mounted on the receiver/dryer of the air conditioner, which is located about 1 foot up from the valve, mounted on the firewall, on the passenger side.
From the best I can tell, the solenoid is turned on/off with the center knob on the dash, the one with the heat/cool blend icons. Turn all the way over to the cold side, turn the AC button on, and the solenoid should activate, and pass vacuum on to the valve. This action, turns off the hot water going into the cabs heater core, and helps the air conditioner work better.
I suspect, your valve is stuck closed, or the solenoid is stuck on. Also, it was weird, but it DID matter what side of the solenoid had the engine vacuum. I noticed, if it was back-wards, the valve would stay closed, even after the solenoid was commanded to be off. I can't remember wich side is what, but just wanted you to try swapping the vacuum hoses on the solenoid if it is not operating correctly.
Hope this helps...
Swanie