The dashboard gauge and the ECU get their temperature readings from different sensors / thermistor circuits so it may just be the dash which is showing the incorrect temperature reading while the ECU is actually getting the correct reading (the one that actually matters).
Your car will either have a single 2-in-1 coolant temperature sensor mounted in the top of the thermostat (will have 3 wires) or it will have 2 separate sensors, one in the top of the thermostat and the other in the side of the head behind the thermostat [see
this post (145 Temp Gauge)]. If you have 2 sensors and you believe you have a problem then try replacing the one in the head as it's this one that sends the temperature to the gauge. If you have the 2-in-1 sensor then it has 2 separate internal temperature thermistor circuits in, one for the gauge and the other for the dashboard. If either of the thermistor circuits is faulty then you will need to replace the complete sensor.
The actual temperature of the engine should sit at a constant 90 degrees whether moving or standing still and the gauge needle should sit at the 9 o'clock mark. On alloy engines with 2 sensors this is 80 degrees (so the 10 degree difference that Simon was talking about) and on the 2-in-1 sensor engines this is 90 degrees. The first fan speed should come on when the ECU detects 92 degrees (sent from the coolant temp sensor in the top of the thermostat).