Here is a link to the wiring diagram for my heat pump. The thermostat that I am planning on buying has the following terminals C, G, Y, O/B, RC, R, Aux, E, and L. The instructions say to jump the RC and R together after you connect the R wire. On the wiring diagram I can see where the the R, Y, G, and O wires match up on the Heat pump(HP) and the thermostat(TS). It looks like to me the W2 on the HP connects to the W on the TS and the C from the HP connects with the B on the TS. It also looks like the W1 on the HP does not connect to the TS but to another place in the HP. I thought there would be wires going from W1 and W2 on the HP to the same terminals on the TS(if I understand correctly that W1 and W2 are 2 different heat settings)? On the wiring diagram on the HP it looks like it wants 7 wires connected from the HP to the TS, however on the Thermostat instructions it only shows 5 wires being connected...any help/insight would be greatly appreciated. Thanks.
The below are all you have to worry about, Yellow need not be wired to Y at the air handler as it is a dummy trminal for convenience, many simply run Y from the stat to the AC unit outside bypassing the Y terminal on the air handler.
Your thermostat is not wired for 2-stage.