The valve is a round tube with three copper lines out the top and one line out the bottom.the center line is the suction line the bottom line is the discharge side. When in cool,the center line carriers the freon to the evap coil thru the line left or right of it. The bottom line carriers the freon from the compressor thru the valve to the water cooled coil. When in heat, the lines switch and the hot gas goes to the air handler(heat) the suction gas goes to the water coil . The valve has a electric (120v/220v) coil that magnetically pushes/pulls the valve to one side or the other. If the valve stays in one location for to long it may get stuck. or go to a 1/2 way position, causing the unit to try to do both cooling/heat. Most home a/c heat pump have the valve work in the cooling mode as this works the valve on every cycle. If you have a stuck valve ,tap it lightly, or cycle it electrically. And yes, if you turn the knob from cool to heat the valve will switch. There is a dead band between cool and heat.(2-3 degrees) so the unit willn't short cycle.