SR: What's too hot? Too cold?
Neal : Lower temperatures results in rapid sludging, can prevent closed-loop fuel injection systems from properly regulating fuel mixture, and results in decreased fuel economy.
Lower operating temperatures provide most people a false sense of security, but lower temperatures, either by thermostat or thermostat removal, do not result in increased cooling capacity. All it results in is a different starting point. Too cold results in unnecessary sludging of the oil, and may prevent engine/fuel/spark management systems from operating at optimum efficiency or power. Engine clearances are designed for normal operating temperatures. Thicker oil causes unnecessary drag.
Too hot is when coolant is lost. An operating, full, pressurized system (13-psi), with 50/50 glycol can safely go to 260 without engine damage from heat alone. The key is not loosing coolant, which results in hot spots, vapor pockets, warped heads, etc. However, 230 degrees and above can change the spark map required to prevent engine damage from pre-ignition/detonation. Most factory ECM spark-controlled engines automatically reduce spark advance as coolant temp increases. Mechanical distributors or non-ECM-controlled engines have problems with detonation at higher temperatures, and that can cause damage.
Scott: Much less than 190-degrees and moisture may start to accumulate in the oil. Up to 230 to 240 degrees is okay if there is no air in the system and a 13 to 15-psi radiator cap is used. Although most people don't like to see the temperature gauge this high, some new cars don't turn on the electric fan until the coolant temperature is 220 degrees.