I've found this line broken/cracked in 2 different XJ's in the past.

Don't know if '97s have the vacuum valve or not.....who's got a '97, do they have the heater vacuum valve under the hood?

yeah for the ac problem check the ball, mine came unplugged without me knowing and whenever i did hear or ac it came out the deforst vent, and no cruise control either, and for the originial question, you must have something wrong with the heater core, i just put in a 180 tstat last night (yeah notice i said last night, it was COLD!) and my heat is hot, i had a 160 and it was wayyy to cold, the heat sucked

Just looked in 97 FSM, no vacuum heater control valve in '97s

So, '96 down do, '97 up don't.

Are you referring to the plastic vacuum reservoir in front of the passenger side wheel?

correct - a "sphere" on earlier XJs, a "cylinder" on later XJs

Confirming, my 1997 does not have the valve. In addition, the cold/hot dial on the dash actually operates a cable that runs near the upper left side of the passenger footwell. Mine had been kicked and broken off its mounting so it didn't do anything when you turned the dial. I used a drill and several heavy zip ties to lock it in place and now it works properly.

I think these just use a flapper to direct from zero to 100% of the air through the heater core to vary the temperature.

Not sure what the sphere/ball is either. The vacuum hose that runs my heater controls taps off the intake manifold, crosses over behind the engine and turns into the firewall under/near the A/C refrigerant pipes. It failed in the firewall so I ran a separate line direct from the intake to the back of the dash controller assembly.

I am going to try and find the issue saturday. Thanks for all the replies (and the diagram). I'll try to write a post on the issue, and hopefully help out some of my chilly comrades.