Yet another explanation... one which I am intimately familiar with this week
Bad head gasket/cracked head. Exhaust gasses enter the cooling passages and get trapped in the heater core. No hot water in heater core = heater not workey. These gasses moving through the system will also cause fluctuations in the temp gauge. If you are mysteriously loosing coolant as well, this may be the problem. Hopefully most of you just have heater valve issues.
Scot Smith
1994 HMC4, Locked
"They're right, Wider IS Better..."
Southern Axle & SteeringRemanufactured Driveline & Steering Parts for Hummers