For some reason, when I come to a stop light and the car sits for a few seconds it starts to blow cold air, instead of heat...

Does anyone know what this could be? I've heard heater core, coolant and thermostat so far...

Not sure about E36s but my old E32 had an electric Auxiliary Coolant Pump that was affixed to the Heater Control Valve Assembly. It's purpose was to circulate coolant through the heater at idle. Worth checking!

Did you recently have the coolant changed? I just did my system. If it isn't fully bled, you can have the symptoms you are describing.

read this thread

http://forums.bimmerforums.com/forum/showthread.php?p=3358334#post3358334

Did you recently have the coolant changed? I just did my system. If it isn't fully bled, you can have the symptoms you are describing.
Your right...

Thanks for all the help guys, it appears i had tons of air trapped inside... I bled the entire system today and now it works just fine...