Sounds like the fan rheostat thingy. Mine went a few weeks after getting the car - exactly the same problem. It's an easy job but I can't remember how much the part was 'cos the car was under warranty at the time (phew!).
This is a common problem, although not one I have encountered personally. A resistor burns out, and can be replaced by a competent technican, or you can buy a replacement module. Cost of resister will probably be 10p (!) but finding someone who can do the job might be more expensive.
I believe the resistor is located in the blower fan housing - but hopefully someone else can confirm exact location.
I had the same problem with the fan blowing only on setting 4. The way to sort the problem and save money is; take the cover off which conseals the fan housing (between engine bulkhead and windscreen). looking at the fan housing from nearside wing, you'll see a wiring loom going into fan housing. unplug the loom from the housing, look in the plug end and you'll see the resistor. cut it out and take it to a shop that deals with radio/electrical components ( like Tandys if you still have one, we don't now in Blackpool). just match the resistor value ( mine was 184c and cost £1.30 ). Now i didn't solder the new resistor back in, as i was told the heat can travel down the wire and cause damage to the new resistor. I just bent the ends tightly around the contacts and put everything back as it was. As soon as i tested it, all 4 fan setting were working as normal. hope this solves your problem. Andrew ( currently enjoying a 91,9000 2.3se purchased while my 900 carlsson is being re-sprayed )
The part described is actually a THERMAL FUSE, this is why it's rated as 184 C (as in 184 degrees celcius), and why it's not a good idea to solder it in (as it will blow the fuse immediately). Maplin stock them in many ratings, an early 900 needs a 212 C.
Use a screw connection for a permenent secure fix...