1996 Ford Contour 2.0 engine revs up and down when the a/c is on?

People say it's normal, but it's not. Engine loses power at the beginning too when driving. Car also overheats fast and i doubt its the thermostat.

The barrings on your nearly 20 year Ford's AC compressor are being to fail.

Compressor bearings are failing putting extra load on engine. The extra load causes water pump to lose efficiency. The overheating can also be a separate issue. Check for coolant leaks if it overheats fast.