Follow the instructions in the Haynes manual for setting the idle, but first clean the IAC Valve, throttle body, and the ductwork. If your IAC Valve is stuck due to oil deposits, nothing will happen when the pigtail is grounded. Under good operating conditions, grounding the pigtail will fully close the IAC Valve and allow you to set the base idle speed. Then, when the pigtail is ungrounded, the car behaves as normal and uses the IAC Valve to raise the RPM for such situations as a cold idle or to keep the engine from stalling, etc.

FYI, a 520 IAC Valve superceeds the 501, so if you're working with an older 501 IAC Valve and discover that it's toast, you can replace it with another 501 or a 520. The 516 is a completely different animal and is used with a later style throttle body which does not have provisions for idle adjustment. The 516 is spring loaded (and passes a metered amount of air even when closed), while the 501/520 valves are not spring loaded and completely stop airflow when they close all the way (thus only allowing the air to pass that's set with the black thumbwheel on the throttle body).

Again, make sure that your throttle body is clean (including the black thumb-wheel air passegeway), the IAC Valve is clean, and all associated tubes/pipes are free of oil. A 501 and 520 IAC Valve should easily open and close as you twist it back and forth in your hand. If it does not, keep cleaning. Try to hold the electrical connector upwards to prevent any carb cleaner or oil from working its way down into the electrical motor housing of the IAC Valve.

God bless,
Fitz Fitzgerald.
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'87 Blue 245, NA 234K