Greetings,

Generally speaking there are two possibilities.  Even though you may not
have a serious overheating probem, the possibility still exists that the
gauge is correct and your actual temperature is bouncing around like you say
it shows.  If so, try some basic cooling system things first.  All are cheap
and relatively easy so it will not hurt anything if you do them.

First, check your coolant level in the bottle and in the radiator and top
off as necessary.  Second, replace the radiator cap.  Third, replace the
thermostat.  And fourth, observe the function of your cooling fan (for
possible malfunction of the thermostatic relay that turns it on and off or
failure of the fan itself).  What you describe sounds like it could be
caused by a bad thermostat or a bad cooling fan.

The other thing to check for is to observe for any correlation between the
spikes in your temperature and the AC compressor engaging.  The AC adds a
pretty significant heat load to the engine so watch to see if the temp gauge
spikes when the compressor is engaged (it does not stay engaged 100% of the
time even with the AC on Max).

If none of those do anything you are not out any real money except a few
bucks for a new radiator cap and thermostat.  The next thing is the gauge
and you've already changed the sending unit so it could be a loose or dirty
connector causing a bad electrical connection or possibly a bad or dirty
ground.  Electrical problems can be difficult to diagnose if it's caused by
an intermittent connection or dirty ground wire.  They invariably work well
when it's in the shop but fail when nobody is around to see what is going
on.

Good luck - Jonathan