In the given circuit the resisters R1,R2,R3 are potential divider network. If the non inverting input voltage is greater than the inverting voltage terminal the output of the op-amp goes to +vsat. Therefore the transistor LM 395 will goes to saturation region (on state condition) the heater gets closed path so the heater will turn on otherwise the heater will be in off state condition.
I have discussed this circuit in the class.Well actually when the opamp is saturated,the LM395 is not saturated too but instead it will be turned off so that the heater go off.When opamp Vce=0,it will drectly carry the Vcc to the ground so the heater will not be on,if the op is not saturated, the heater will be continously on.The op amp will be saturated depends on the V(T) set in LM335.
i think you have misunderstood the open collector representation of the opamp output.... actually it just means that a external pull up resistor is mandatory....
here when the opamp saturates the output transistor is turned off and hence current is supplied to the transistor LM395 through the resistor R6 and the heater is on....