Good question Peter. I agree that water temperature is not ideal for deciding when the engine is up to temperature. As you say the gauges often reach their normal range within a couple of miles, especially if the sensor is positioned up stream of the thermostat (i.e between the cylinder head and the thermostat). If that is the case you are only seeing the rate of temperature rise in the cylinder head area. Thereafter, the temperature is controlled by the thermostat itself. I don't know, but I guess that the obsession with water temperature gauges is rooted in history when boiling coolant was a major source of breakdowns and so you needed to keep an eye on it.
As you say, oil temperature is by far a better indication of the engines overall operating temperature. I've got a dashboard with the 4x round Smiths gauges and I've been considering a modification to install a Smiths combination water temperature and oil pressure gauge (the 2x half moon type) and then add an oil temperature gauge in the spare position left by this. I'm also considering fitting an oil pressure light, there is pressure switch at the oil pressure sensor, so I'm going to investigate this. Probably both projects for over the winter months.
