After adjusting the idle control valve I was able to fix the problem of irratic idle. The idle valve was set to let through very little air when disconnected and that was resulting in idle of 500-700 rpm. After reading Stevebfl's post that when disconnected the idle valve should run the car at about 50rpms greater than usual I adjusted the screw on the side of the idle control valve so that it would supply more air. Then I restarted the car and the problem was gone!
This is a very good forum! I used to drive with a potentiometer disconnected because it used to give bad reading and the car used to stall. To fix my car I didn't even by a new potentiometer. After reading this thread I unscrewed the potentiometer's 4 screws and moved one of the touching arms(wipers) that touch the potentiometer's resistor surface so that the arm would stay on the right track. One of the arms was bent to the side and was causing drops in readings. Then I adjusted the potentiometer by slowly moving it's right side up and down to supply about 0.75 volts(pin 1-2) at normal idle. After that my car was idling but it was an irratic idle and I solved it by doing the things I described at a very top of this message.
I don't know how much money I saved but I saved a lot!
My car is now idling! Thanks to everyone who helped especially to stevebfl and zhandax.

Hurshi

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1989 230E, 8v, 166.000 km, updated to 94/95 trunk & hood
2002 Daewoo Nexia 50.000 km
Sold:
1987 VW Jetta GLE 16V, Recaro seats
1982 Volvo 240 DL (lovely car!)
and few more american cars.