Erratic Temperature Guage, (95 JGC V8)

The temperature guage on my 95 JGC (V8, 5.2L) jumps up and down randomly. It swings all the way up almost to red overheat, then drops back down to 150-200 range. I don't think the engine itself is overheating, because the Temp guage moves around too fast. It'll go from 150 up to 250 and back down to 150 in about 15 seconds. It does it all the time: while idling in Park and while in gear, at 30mph, at 75mph, in hot and cold weather.
Any ideas? I think it may be posessed.

Thanks again for all the great advice so far. We all really appreciate it.

well I think you might be right, it's posessed. try replacing the Tempature Sending Unit.