Heater control valve will cost you about £15 from eBay and is so easy to replace.
Before you buy that though have you replaced the coolant or had the car serviced? If there's an air lock it can impede the air flow. To breath it take the cap off the expansion tank and let the car run until the fan comes on or about 20 mins. Do not drive it! Then squeeze the pipes in turn for about 5 mins and any air should work loose. You may also need to do this once the Heater Control Valve is replaced.
This is easy DIY so don't be fooled in to thinking it's a garage job.
Good luck
Pete, June 2008
Make sure the heater control cable has not kinked or become detached - so turning control does not move the heat/cold flap. The cable will be down in the driver foot well in the middle console.
David, June 2008
The heater control valve on these is electrical and notorious for failing. Its on the bulkhead above and behind the engine. Look for the rubber heating pipes going into it and voila!