What do valet mode do - 1997 Jaguar XK8

Tin opener

1. 1 Insert the key into the ignition.
2. 2 Turn the ignition switch to "ON." Do not start the engine.
3. 3 Press and hold the valet/override button within five seconds of turning the ignition on. The valet button is located beneath the steering column.
4. 4 Release the valet/override button after the security indicator light turns off.
5. 5 Turn the ignition switch off.

Getting stuck in valet mode is so annoying, but it really IS possible to reset the Security Unit (SU). Though not mentioned how in the Owner's Manual (OM), it is possible to set Programming Mode (PM) while in valet mode, even if you have lost or replaced the remote. See the OM about switching from LOCK-ON-LOCK 10 times. It takes some practice, but the horn will beep when you are in PM, at which point you can reset your (old or new) remote.

See https://pixcl.com/2005-2008-subaru-forester-stuck-in-valet-mode/ for more detailed info.

it locks the trunk so the valet guy can't pop the trunk and get your goodies, you lock the glove box after putting it in valet mode

It is used for programing the alarm, it is used to disarm the alarm without the remote, [in case remote is damaged] and it is used to put alarm system into valet mode, [service mode] valet mode is only really needed if the alarm has been programed for passive arming, [alarm arms itself].

Your main use for the valet switch, [if programed for active arming instead of passive arming] is to have a way to disarm the alarm if the remote does not work.

To get the car out of valet mode all you need to do is put key in a door or the trunk and lock and unlock and that gets it out of valet mode. or hold the unlock or the lock button on the remote and that will get it out also.
The windows are working correctly, usually the auto window does not work after removing battery also, check yours, if you push the down button and release the window will go all the way down. if it does not then that will need to be programmed also.Let me know the out come good day.

was it a professional or shade tree install? the following is off vipers website:
disarming without a remote control
This feature allows you to disarm the security system without the
Remote Control should it be lost, damaged, or disabled. In order to
disarm the system without a remote remote control, you must have
the vehicle’s ignition key and know where the Valet button is
located. Be sure to check with the installer for the location and the
number of presses of the Valet button required to disarm the system.
To disarm the security system,
turn the ignition to the ON position.
Press the Valet button the
preset number of times (one to
five times) within 15 seconds. After five seconds the system will
disarm. If the system does not disarm, you may have waited too long;
turn the ignition off and on and try again.
if that doesn't work try this other

valet mode
You can prevent your security system from automatically arming
and triggering by using Valet Mode. This is very useful when
washing the vehicle or having it serviced. In Valet Mode, the
security system will not arm, even with the Remote Control, but
all convenience functions (door locks, trunk release, etc.) will
continue to work normally.
To enter or exit Valet Mode:
1. Turn the ignition on.
2. Turn the ignition off.
3. Press and release the Valet
button within 10 seconds.
The status LED will light solidly if you are entering Valet Mode,
and it will go out if you are exiting Valet Mode.

Whilst the vehicle is running with the normal key being used hold down the valet button for a few seconds

Just bought my 98 a week ago....from what I can figure out....the valet mode disables the inside button....until the trunk is opened by the key. From what I understand also....there is a valet key....and an owner key. (I saw the differences online this week) which also ties in with valet mode.

I have seen this before, each time i have seen it i have to reprogram the valet key. This needs to be dont at the dealership, make sure you bring the master key otherwise they cant program the valet key.