Mk2GTI2.016v is correct the blue temp sensor is for the ECU, and is worth replacing for the £10 or so it costs. The symptoms will be poor running from cold mostly. Once the car is hot the signal isn't used however, its only for 'choke'. If you get the car up to temp (oil temp over 80 degrees) and unplug the temp sensor The idle should sit about 800-900rpm, if it drops or rises significantly then you need to check the vacuum system & reset the idle & CO.
The ISV is responsible for controlling the revs when you dip the clutch mostly, stabilising the idle and smoothing out on/off throttle at low speeds. If when you rev the car the revs plummet then the ISV isn't functioning correctly, it should fall to about 2k then drop slowly. You'll also want to replace all the braided vacuum hoses, not forgetting the one behind the throttle body which you can't really get to without taking the inlet boot off. There are also some plastic blanking caps on the thick vacuum hose to the brake servo, make sure these arn't split. Next thing to check is the rubber bung in the rocker cover that the plastic 'flying saucer' plugs into, then take the inlet boot off & check in the folds for cracking. Then last of all while the inlet boot is off give the throttle body a damn good clean till its nice n shiny
Once you've got all this sorted out, reset the idle/CO:
1. Get the engine up to temp, at least 80 degrees on the MFA oil temp display
2. Turn the engine off and remove & plug the intake side of the breather pipe between the rocker cover & air intake
3. Hold the MFA button in and turn the ignition on, off and on again, then start the car. This puts the MFA into a 'secret' mode. Put the MFA switch to setting 2 and press the button till you get the digital rev counter, position 2 I think
4. Unplug the blue temp sender and rev the engine cleanly over 3k rpm 3 times, letting it return to idle between each rev.
5. Check the rev display, adjust the idle with the idle screw on the throttle body to about 850-900 rpm. Clockwise to decrease, anticlockwise to increase
6. If you have a CO meter, block off one of the talipipes (i use a load of duck tape) and shove the probe up the pipe. Follow the manufacturers instructions, and set the CO to about 1.8ish using the allen screw on the MAF, clockwise to increase, anticlockwise to decrease.
If you don't have a CO meter, turn the screw in until the engine starts to sound rough then back it out gradually till the idle sounds smooth & even. Check the aerial or bonnet stay for vibration, you want it smooth as possible. This will get you close, then take it to a garage to get it set properly
7. Reset the idle to 850-900 rpm if it has changed, and adjust the CO accordingly, repeat till you get about 1.8 at 850ish rpm
