Volvo: C70 overheating, coolant tank, coolant level

Question
I just bought a C70 Convertible that's got a strange overheating problem.  The car runs hotter when it's in motion than it does when it's stopped in traffic.  It almost overheated on my wife today - she was alert enough to turn on the A/C just in case the fan wasn't spinning.  I drove it around tonight and the fan was spinning and the temp gauge was right in the center.  The instant I got moving at 30+ mph, the temp started to rise.  I didn't get it to the lowest red bar (like my wife saw earlier today), but it was getting close.  Maintenance item - I replaced the coolant tank cap a week ago because the car did lose a bunch of coolant when the old cap cracked.  The coolant level in the tank is OK though.  Any thoughts on this?  It seems to be doing the exact opposite of what I would expect.

Answer
James,
Have you verified that the engine is really hotter when the gauage went up? I would replace the t/stat and try it again. If the overheating continues I would then suspect a head gasket allowing compression/exhaust into the system csusing the water temp to rise. There are tests that will show if compression is getting into the cooling system. Sometimes they use a H/C C/O tester and there is also a chemical that is used to take in the fumes off the top of the filler bottle that will change color if exhaust is present.