On the Type 4 engine, the auxiliary air regulator is located immediately behind the intake air distributor. It's a cylindrical object with an electrical connection on one end and two large air hoses. One hose comes from the S-boot after the air flow meter and goes into one end of the auxiliary air regulator and the other hose goes from the regulator to the intake air distributor.
The auxiliary air regulator provides for a slightly fast idle for a cold engine. It does this by allowing more air in, bypassing the closed throttle valve. It does not, however, change the fuel/air mixture because the air entering the auxiliary air regulator has already been measured by the air flow meter. It just lets some air bypass the throttle body for a fast idle to help keep the cold engine running.
There is a rotary valve in the housing, with one hole in it. This valve is connected to a bimetallic strip. When the engine is cold, the bimetallic strip rotates the valve so that the hole is aligned with the two air hoses -- air can pass through the valve. When the ignition is turned on, a heating element begins to warm the bimetallic strip. As the strip warms, it begins to close the valve. From the coldest, the valve will close in about 8 minutes. When fully warm, no air will pass through the regulator.
The regulator can be tested by blowing through it with the engine cold -- air should pass freely. When the engine is warm, you should not be able to blow through it.