the vacuum valve can pretty much go on either hose but usually it goes on the (look from the front of the car) right side towards center of chassis.
the valve shuts off running hot coolant from the water pump, for cool air or A/C air the valve shuts down and does not allow coolant to run into the heater core. the duct fan blowing over the heater core cools the coolant already in the core then cooler or cold air flows out the vents.
most likely as others have pointed out the heater core was leaking and thus was disabled.
to replace the heater core will require A/C service on your car(if the a/c is functional)
you will need to drain the A/C system recover the Freon, then disconnect the a/c lines and remove the A/C expansion valve just in front of the firewall on the evaporator core lines .
this will allow you to continue taking apart the Dashboard at least partially and removing the 3-4 nuts on the firewall to pull the climate control box out with out damaging it. the heater core is buried in the bottom of the box and cannot be accessed without taking the climate control box apart almost completely. then would be the time to also restore the climate control box and inspect for damage from animal or weather.
it is pretty involved.
the a/c system will then need additional work to be made functional long term. the A/C dryer must be replaced with each service. the condenser core should be inspected and possible o-ring replacement on all pipe joints. compressor should be inspected and refilled with mineral oil for the proper refrigerant you plan to use R12 or 134. replacement dryers are spec'd for 134 and new condensers are spec'd for 134.
your looking at 500$-1000$ in work before you even really get into a climate box rebuild unless you do the work yourself. then your still looking at around 500$ for the A/C service if you do not have a a/c service manifold and a vacuum pump to get the system ready to be oiled and filled.
the best way to get the climate box out is disassembling the entire dash and removing the frame, again very involved. it can be done with a partial disassembly of the dash but it is the worst game of tetris you will play there is a high chance of causing damage to the box this way as well. the fiberglass on the box is very old, fragile and can crack or break easy. reproduction climate control boxes are available but will require work to make usable, nothing beats OEM.
photos from my rebuild
http://s1031.photobucket.com/user/72hcode/library/Heater%20Box%20AC?sort=2&page=1