Long story shortened. I bought an '05 S60 2.5T AWD. Thermostat housing was replaced today (used car dealer pulled a 'known good' from an XC70). Ran fine. Midway on gauge with occasional bump up 2 lines (assumed air purging from system). That happened the 21 miles from dealer to stop #1. Topped off system. Drove 19.5 miles to stop #2. Picked up family. Drove approx 22 miles on fairly straight & flat (Rte 101 in Milford to those who know the area) it started to climb up. Red lined. Being a diagnostician anyway, I "gave it the beans" and it dropped. Let off, slowly climbed. I will note that someone added prestone to the red stuff (not me). No exhaust smell from bottle with engine running.
Just got back from said trip (45deg F), it was stable just below mid-way (norm). Turned on the heat. Noooo heat. Which brings up another question: These things have an electronic control valve like my old Caddy?

 

It was 43deg F this morning here in sunny NH. I drove the S60 to work. Temp was normal (1/2 a needle below mid). Still no heat (heated seat worked tho). I got to the interstate. At this point 35min / 31 miles into the trip. About 2 miles onto the interstate @ 65mph, the needle started rising. Didn't go as high as it was previously, but in the red and warning came on. I slammed the gas and hauled @$$ to work (about 6 miles away). Previously noted that if I accelerate, the temp will drop. I'm guessing the waterpump impeller is loose and flippy-dipping around. Seen it before on other cars, usually with noise. Under 55mph and no hard rev-ups it'll stay normal. Get her up to 4k or a medium>hard load and it's like the fluid is cavitating or impeller not turning. So I said f$%^ it. Bought a timing belt/waterpump/tensioner/idler kit and a thermostat housing ($250 w/2 day shipping all together).

 

Update: Replaced thermostat assy today with a brand new one. Let it warm up and beat it up. Stayed mid-gauge. Now to get the cabin heat to work. Carefully picked out the lint from the sensor opening. We'll see how that goes tomorrow am.
This issue basically equates to the "known good" used thermostat we decided to put in was not operating (or installed) correctly. I also made sure the thermostat vent was at the top. Upon removal of the old assy, I noticed their mechanic had it at the bottom. Probably didn't help much.