heating blowing cold air all of a sudden?

Hi, i have a 1.1 saxo, and the last month or so the heating wont work properly.... by that i mean sometimes it will blow hot air and other times it wont. Even when hot air does come out it only lasts a few minutes and then goes freezing cold again! Any ideas?
also, (dont know if this is linked in any way) but the temperature light has been coming on and off over the last week or and and tonight when we stopped the car smoke was coming from under the bonnet and smelt like burning rubber- with a hissing noise. Im useless with cars as you might tell but the noise was coming from nearest the driver side of the bonnett. Help!