Using the scangaugeII to monitor the water temp, you are absolutely right.

Every morning when I turn my DII on, it takes about 2-3 min to get the temp needle at "normal" (half way on the gauge) while this happens, the scangauge tells me the following:

At start up, water temp is about 80F and then takes 2-3 min to reach "normal". As soon as the needle reaches the half way mark, scangauge reads 155 degrees F. However, the scangauge water temp keeps rising and usually stays around 187 degrees +/- 3. This is the normal operating temp. I have had it as high as 203 while off roading while needle remained at normal during all of these conditions... the actual temp is fluctuating about 20+/- degrees. I plugged my scangauge into a friend's 04 and her temp was reading 205 while idling... but she was low on coolant...