Your temperature gauge will move alot between 80 and 95 C; if it starts going up to 100 and above, definately have a tech take a look. Many people will tell you that it is "normal", but generally you don't see temps above 100 unless something is functioning correctly or if the ambient temperature is above 95 F. A coolant flush might be a good idea.
As you come to a stop, the idle will generally fall from 600/700 RPM range to 500/550 range. This takes several seconds and is normal. Once it has fallen to the 500/550 mark, it should not oscillate (or bounce up and down as you described). The idle is a function of sensor inputs & various electronics, so most people see an idle between 500/550. My E420 generally idles just a micron above 500 RPMs regardless of AC or electric load.
If your idle is continuously oscillating, there are a number of possible causes. See if you can narrow down what triggers it or if there is a way to change how it behaves:
- Is it different with teh A/C on or off?
- Is it different with varying electrical loads?
- Does the car misfire?
- Does the car hesitate under acceleration?
As far as I know, the wiring harness along applies through '9x-'95 models. Your car is a '97, so a wiring harness wouldn't be as likely. I'm not a tech, but I'm guessing vacuum pressure. If there is a misfire or any subtle misses, try a bottle of Chevron's Techron. It's pretty mild, but has helped some.
The engine requires Premium Unleaded (92/93 octane). I purchased my E in Dallas, TX and have since relocated to Seattle. It's not terribly fond of the gas up here. In Texas, Premium is 93 octane; in Washinton it's 92 Octane. I can't scientifically provie it, but I think it has made a difference in my car (and not for the better...)