Whatever you do, don't feed it the mix that is sold for cockatiels (when it's old enough). It's unhealthy and fattening. I use the stuff I get from my vet. It's Harrison Bird pellet formula. All organic and no preservatives - its very heatlhy.
Their diet should not consist of more than 10% seeds and they should be provided with leafy green vegetables and things like carrots, squash, peas, broccoli, etc.
My advice is to take it to the vet and get it checked out (they'll do a test on the feces to check and make sure everything is normal and that there isn't anything wrong. I think it's called a gram stain). They'll also show you how to clip the wings or do it themself, if you choose to clip them and will be able to answer any questions for you (though of course we can help).
How warm is it with that heating blanket? If it gets too toasty, thats not good.
Be careful about using Teflon or non stick pans. When they overheat, they emit a noxious gas that is deadly to cockatiels and some other birds.
It does sound that the bird is too young to be sold though, if its still eating formula.
This is a good, responsible site:
http://www.cockatiels.org/
It has diet info, iirc.
I think my kramer (cockatiel) is the coolest. He (well it's technically a she, I think

) will just spend hours with me, sitting on me and watching tv or walking around on my shoulder
