You say it is a 158w TEC and you connected it to 12v but what we really need to know is the TEC's Vmax. If it is a standard 127 couple TEC the Vmax will be 15.4v or thereabouts. If it has more thermocouples it will be a higher voltage.
A 15.4v Vmax TEC that is working correctly
and connected to 12v will within seconds feel hot on the hotside and cold on the coldside. You have only to hold it between forefinger and thumb in the middle of the flat sides to notice this. It is not advised to apply power for more than a few seconds because without adequate cooling on the hotside it can quickly go into a "heat loop" which if continued long enough wil destroy the TEC. Whilst testing TEC's if both sides start to feel warm the "heat loop" has started. With your unit it was either "Dud" when you bought it, damaged in storage or during your testing it has been severely compromised.... it is not burnt out, but not far from it. Note when buying cheap TECs from ebay they may not all work.
TECs should never be connected to a supply approaching their Vmax without adequate cooling being affixed to the hotside.
Most 15.4v units can be simply tested with a couple of fresh 1.5v batteries (3v total) and you don't stand nearly so much chance of damaging them - you still only need to apply power for a couple of seconds unless you have extremely badly calloused fingers !!
Note also that Vmax should never be exceeded.Edited by zipdogso - 12/19/10 at 6:24pm