After going through all the usual things to check, I concluded that my idle ECU was bad. I bought Dave's modern idle ECU (the Volvo one) and its like I have another car. Very smooth idle and transition. Plus, you can set your preferred idle speed by DIP switches. Mine ran fine at 775, but I went with 850. There is also a 100 RPM AC bump. But you really don't need it. The response time is quite fast, and so there is virtually immediate compensation for AC, fans, headlights, etc.

If you need an idle ECU I would recommend this. Of course, it is no substitute for multiple problems such as vacuum leaks, bad ISM, plugs, wires and injectors. Of note, I did some testing and it does have the capacity to compensate for some minor deficiencies, so if you have exhausted yourself trying to make it perfect, this unit could take care of these. The original idle ECUs do go bad, and this product is a stellar addition to replace and/or modernize this often perplexing system.