My temp guage only rises 1/4 tp 1/3 of the way up. It used to go to exactly 1/2. The strange thing is that it will rise to 1/2 way while idling for a few minutes, but fall back down again soon after I start driving. I changed the thermostat but the problem still persists. Anyone know whats up?

Your thermostat was bad, and you have had the bad fortune to get a replacement that is bad also! Your car can reach operating temperature while sitting, but the extra cooling that comes from wind speed cools your engine below that point.

This condition could fit the scenerio that you discuss in your second post, although not exactly. Your car may not be getting the proper data to tell what the engine's temperature. Your spark plugs could be fouled by now.

What year is your brick? Have you read your trouble codes?

Do a search on reading codes, and view this topic on Volvospeed.com.
--
96 855R, 95 855,854, 90 744 Ti - 340,000 miles driven

This definitely without a doubt your thermostat. pick one up from a parts store--make sure to get the spider socket too, and it can be put on in ten minutes or less, and you won't need silicone sealer.

Mine had the same problem. A $10 part cured the problem.