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Don't know about 3rd gen Preludes, but the 2nd gen Prelude would do that idle hunting for 2 reasons. 1) Air in the coolant system would end up not "hitting" the temp sensor in the thermostat housing, and 2) the IACV valve was bad.
The idle is hunting because computer thinks car is cold but it is not.
The IACV valve has coolant going thru it and it uses wax that expands and controls how much air bypasses the throttle plate. That wax is kinda, say, like a brick after many years and does not work. If you are in a climate that doesn't get cold (Texas or Florida for me), then you don't need that IACV valve IMO. As for bleeding the coolant system, probably should do that with engine COLD, open bleed valve and fill with coolant until coolant flows out. FWIW.
 
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