Heater hose part question

So I'm having some issues with my 89 not blowing enough heat. I was messing around with it last night and discovered a serious vacuum issue. The ball behind the bumper was disconnected. So, fixed that. Now, I noticed that there's some sort of valve on the top line going into the heater core. It has a vacuum line on it too, and it's broke. What does that part do? I had my brother sit in the jeep with his hand over the vent and I worked the arm on the valve manually. He couldn't feel a difference in the heat.

Thats a "heater control valve". You can replace or bypass. I have heard of other guys with older cherokees bypassing it. There is no problem with bypassing it. This will allow flow thru the heater core at all times but the heat will only come on when you turn on the blower.
This thread should help.
http://www.jeepforum.com/forum/showthread.php?t=652021&highlight=heater+valve+bypass