I can turn the fan speed up and down as normal. The knob that changes the temperature up and down is what is screwy: Turning the knob left or right either doesn't cause the temperature to change, like it skipped, or the temperature goes up (warmer temperature) by a degree but then immediately jumps down. Or it just bumps down (colder) with any twist of the knob. TJ Baker is experiencing the same thing: using the knob the setting in the display goes down instead of up.
This is not a feature; it's a bug. I have the same thing with mine.
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@TJBaker57, I have the HVAC temp / fan controls on the upper LH side of the wheel, and have gotten in the habit of using the steering wheel control (SWC) for temp changes.
He and I have the only two years where the HVAC controls were on the wheel. Starting in '04, that area got changed over to OnStar functions. But you don't have SWC at all, so it's kinda immaterial for you, anyway.
If you stick with the dial on the control head, it will 'wake up' and start moving the correct way when you turn it higher or lower. But every time you first touch it, the temp display will move in the opposite direction from where you first turned it. Since I have the SWC, I just got in the habit of changing the temp from there, as it always works properly from that location.
For you, if you didn't want to deal with this, a used control head would potentially fix this for you, but you'll need to be careful, as some of the control heads don't work properly with some MY (I think at least one breakpoint is the early '03-'04, vs. the '05-up -- there's a lot of little things that got changed between '04-'05). I kind of think of that point as a 'mid-model change', or MMC, even though nothing on the exterior really changed (front / rear fascia, etc.)
I mention 'used', not just because it's cheaper, but also because I think it's one of those parts that needs to be added to the communication bus, if it's brand new (via a Tech2), just like a door switch module.
Somewhere on this site, there's a post that talks about control head compatibility by MY, IIRC. If it's not here, it might be on the 'old' site. But I think it's here.