Might be worth getting hold of a copy of Rave and reading up on the cooling system - have you checked the flow when the engine revs are up? There's a "By-pass flow valve" that only opens up when the revs are above 1500. From Rave:-
By-pass flow valve
The by-pass flow valve is held closed by a light spring. It operates to further aid heater warm-up. When the main valve is closed and the engine speed is below 1500 rev/min, the coolant pump does not produce sufficient flow and pressure to open the valve. In this condition the valve prevents coolant circulating through the by-pass circuit and forces the coolant through the heater matrix only. This provides a higher flow of warm coolant through the heater matrix to improve passenger comfort in cold conditions.
When the engine speed increases above 1500 rev/min the coolant pump produces a greater flow and pressure than the heater circuit can take. The pressure acts on the flow valve and overcomes the valve spring pressure, opening the valve and limiting the pressure in the heater circuit. The valve modulates to provide maximum coolant flow through the heater matrix and yet allowing excess coolant to flow into the by-pass circuit to provide the engines cooling needs at higher engine rev/min.
I had a few problems with mine (most of those mentioned in the posts above). A few of the things I did / checked:-
Make sure you bleed the system properly - check Rave or search on here for how to do it if you are not sure
Drive the car for a good 20 mins with the revs up above 1500 (i.e. don't just let it sit idling)
See if the temperature gauge is in the middle range
Check the coolant levels again
Check all the hoses and the heater are hot
Check to see if the rad is hot at the top and the bottom
I ended up changing the thermostat and flushing the rad; cured it for a year but eventually I had to replace the rad when it started leaking.
HTH