The only way to tell for sure is by the sticker under the hood if it's R12 or R134a, but you can check the recharging ports, too. Screw-ons are for R12, quick-connects are for R134a.
If the system hasn't been opened, and there aren't any obvious leaks, it should be salvageable. The first thing you should do is take it to an a/c shop so they can put a vacuum on the system to 1) take any remaining R12 out and 2) find if the system holds vacuum. My guess is that it will not hold since it's blowing hot air for you now. Is the compressor kicking on when you turn on the a/c? If not, that's another sign the system is probably empty (assuming the clutch, the fuse, and the WOT cutout relay are good). Look for oil leaks around the connections on the hoses. This will show you where you'll have to replace O-rings. One note: if you have to open the system...hell, even if you don't you should replace the accumulator. That's that big black can up by the firewall. All it consists of is a sponge in a can, but it can mean life or death for your a/c's cooling capacity. Water is the system's #1 enemy.
Okay, after the system is good & tight, you can get a conversion kit from your local parts store for about $35-40. The kit should have all of the necessary charging adapters, a can tap with hose, an 8.5oz can of oil charge & seal conditioner, 3 cans of R134a, and a sticker to put under the hood to tell the next guy who services it that the car's been converted. The procedure is very simple and straight forward. You don't have to worry about blowing your hand off because the charging hose will only fit the low pressure side, as will the low side fitting/adapter. Aren't those SAE guys great?
It only takes about 30 minutes to totally convert & refill the system.
Don't let anybody con you into staying with R12, either. All it does is cost more (a LOT more) and blow holes in the ozone layer. You can't get R12 without a license anymore, plus production of the stuff stopped years ago. It's like $30-35 per 12oz can now, versus only $5-6 for R134a!!! Anyone that says R134a doesn't blow as cold is invited to sit in my converted '87 Mustang and get numb ears like I do.
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Capri306, Moderator, The Mustang Works Online
1979 Mercury Capri, 5.0L -- C4 -- 2.73
1987 Mustang LX Notch