[jackass#1]

might want to check the following:
fuel pressure (your manual should give specs)
egr valve(a very commomn trouble with the s10)
vacuum leaks
timming should be set 0 tdc


i have a 91 as well (but with a 4.3 tbi) my idle would surge like you described, drove like that for a good year and a half. never could figure out what it was, until the fuel pump went out one day. put a new one in and it totally solved the prblem. i needed 9 to 14 psi and when i had it tested early on i had somewhere between 8 and 10 psi. so i thought it was good, wrong.
hope this helps alittle.