Yesterday while driving home, I decided to use my automatic climate control. I set it to 72 and let the system take over. After a few minutes I noticed that steam or smoke would appear to flow out of the vents in cycles (visible for a minute, then it would go away), and that it had a sweet smell. I also noticed that when I set the climate control to coldest, it would go away. I started thinking that the smoke was linked to when the heater came on to temper the AC as the system was controlling for 72 degrees.

Based on that assumption, I scoured the boards for answers, and so far I've come up with a possible leaky heater core; the idea being when the heater cycles on during automatic control, coolant escapes, evaporates, and gets blown into the cabin. There isn't enough mist to fog up my windows. And my AC appears to be working very well, it's ice cold when I've set it to max. However, I've also noticed no drop in my coolant levels after 1000 miles, so if there's a leak, it's slight.

Do I have this diagnosis right, or is there another possibility?

Suggestions were correct. Ordered a heater core and two o rings from FCP Groton, they went in this afternoon in about 2 hours start to finish, including a coolant flush.

I could see the evidence of leaking on the old core, all along the top side. It appeared to be slowly dripping, and there was also evidence of dripping on the bottom of the housing and out under the carpet on either side. Luckily it wasn't much, and was cleaned up easily.

The local shop was going to charge 4 hours of labor, so I saved a bunch of dough and finished quicker than them! Thanks guys!

Antifreeze always circulates through the heater core, regardless of the cabin temp settings. The vents regulate what heat is intorduced.

You do have a leaky core. It is not hard to DIY, just make sure you get a couple of O rings with the core. And fix it before it gets cold out, also a good time to flush your antifreeze.

Klaus
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I still miss my 164 and my 854T. Just driving a V70R :)

yes, this is indicative of a leaking heater core (only slightly at this point)