Engine running too hot?
 

With my new engine, the in-dash thermostat consistently rises to the midway point in city driving & idle...... while driving, it returns to the 1/4 setting...... is this normal, or a possilbe problem?

My old engine never went beyond 1/4 of the way.......

Thanks,

Matt

retard your timing

coincidently..... my engine is running very rough..... timing being off causing both problems?

check for vacum leak

Nah, check your timing and retard it only if it's advanced. If it's OK and you retard it, and it stops overheating, you're just masking the cause of the problem at the expense of power and economy. It shouldn't overheat with stock timing.