Sorry for the long post. If anyone is interested in Cooling Systems in cars here is some info...
Can everyone say "Thermodynamics"?
Unfortunately Thermodynamics is one of the hardest areas of analysis/study/design/etc...
Water has a certain heating/cooling ability, in other words - the amount of energy that has to be added or taken away to change 1 kilogram of water by 1 degree. This is known as Specific Heat Capacity. IIRC ~4180 J/kg/degree.
Water has one of the highest specific heats. Which is why it is used in cooling systems for cars and is also why the tomato in a toasted sandwich stays so f*cking hot afterwards! (Tomato?s have a high water content.)
The heat storage capacity of you cooling system is based on the volume of coolant in the system.
Heat Transfer between the engine coolant and the air is via the radiator.
The cooling rate applied by the radiator is affected by the temp of the air flowing through the radiator, the speed of the air flowing through the radiator, the flow rate of the coolant through the radiator (flow created by the water pump and controlled by the thermostat), the material used for the radiator, the total surface area of the fins (total area the air is flowing past), and total surface area of the tubes (the total area of the coolant contact inside the radiator). So change any one of these and the cooling rate is affected - for example the thermostat changing the coolant flow rate.
The heat being added to the coolant by the engine is affect by the total contact area of the coolant in the engine, the flow rate of the coolant through the engine and the heat the engine is actually putting out (affected by revs).
From all this we can see that the amount of heat a cooling system can dissipate can vary quite a lot. When the system is too efficient for a given set of conditions, the thermostat will control flow, and when the system is not efficient enough, the temperature will continue to rise. In other words, if the amount of heat being added by the engine is less than that being removed by the radiator then flow is controlled and when the engine is adding more heat that can be removed by the radiator then the system overheats.
Almost all of the time the engine is running, the heat being dissipated by the cooling system to the air does NOT match the heat being generated by the engine. Hence, the thermostat is controlling things (cooling system is dissipating more than the engine) or the thermostat if wide open and the system is getting hotter (cooling system is dissipating less than the engine).
Most thermostats have an approximate temperature that they open (allow flow) - the most common being ~86 degrees.
As for what is the correct Operating Temperature for an engine to run at, this is affected by many things... thermal expansion rates of the various materials (block, rings, head, etc) this also affects tolerances/gaps/clearances, wear rates at different temps, thermal stress, expected thermal output of the combustion chamber (revs related), etc. In theory the higher the temp the engine runs at the more Thermodynamically efficient it is but this can affect the other things I listed. The manufacturer works out what is better for the engine and sets up the cooling system as such.
If the engine is going to run at higher levels of operation than a normal road usage*, then generally you need to improve the efficiency of the cooling system (increasing the cooling system?s ability to dissipate heat). This can be done by increasing the frontal area of the radiator, going from a two core to a three core radiator, gearing down (or up) the water pump to get ideal flow rates at the higher average rev ranges of race engines, etc.
Another thing people forget is that the oil helps to cool the engine too. So by adding an oil cooler you can achieve a few things:
1. Longer oil life and/or better oil quality over the period the oil is in the engine.
2. Cooler engine temps.
3. Higher oil pressures (the oil isn?t thinning out as much due to lower average temps)
4. As a result of the above, longer engine and turbo (if fitted) life.
* by higher levels, I mean higher average revs, like in racing, track days, etc.
NOTE: This is my understanding based on my thermodynamics knowledge (minimal) and I reserve the right to be corrected by anyone that knows more than I.
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. And yes the weather has been hot in Perth lately. Just seems that the under bonnet temp in my 1600 is quite warm, is this normal because of the turbo, any help will be appreciated 
Okay then, heres what I have gathered so far. My radiator is a brand new custom 3 core with a slightly larger surface area than the standard 1600 jobbie, 10" thermo fan that kicks in at 85deg, car will IDLE at around 86 deg, but under load seems to run at about 10 deg more than that (94/96). Mind you that was on a HOT 
Perth summer day (35+deg). Under bonnet temp is noticably higher than my Lseries 1600, but that may be due to the turbo 
LOL. I will ring SST who tuned it and see what they have to say. Thanks for the help dood's