I've got a VDO Temp gauge installed in my car, and it reads consistently low. It's been my experience that if you use teflon tape or pipe dope on the threads of the sensor, it will read low. I install them dry, with clean threads and have no leaks as long as everything is tight.
Anyway, I checked my water temp at the radiator with my Omega digital temp gauge with a fast acting food type thermocouple I use for checking meat (ya, I washed it afterwards..), and for giggles, at a drain plug I have in the block with a pet-cock fitting. Both sites were within 5 degrees of each other (about 162 degrees or so), but my VDO temp gauge read 150 ish.
Amazingly, a cheap $12.88 mechanical temp gauge made by Sunpro that I bought for another car was accurate. I paid like $50 for the VDO..
Hope this helps
Billy