The blue pot adjusts the reference voltage for the PIC's ADC. It must be 2.560V or else the ADC will not have the proper step size. A word about that- the PIC has 1024 steps on its ADC, and the ref is 2.56V so each step of the ADC is 2.56/1024 or 2.5mV. The LM335 temp sensors change 10mV per degree Celcius. These devices read out in kelvin, which at room temp is around 2.8V or so... too high for the PIC's ADC at 2.56V ref. I used the 12.K resistors to divide the output of the LM335's by 2 so that each degree is 5mV... exactly 2x what the PIC's ADC step size is. This means that for each step on the ADC, the temp has to change exactly .5 degrees C. So this means my ADC will now read out directly in degrees C.
I don't have to do a messy conversion in software.