My 2002 oldsmobile intrigue was overheating so i bought a thermostat and waterpump and placed it in, now the needle will go way up to hot and then back down to middle again, and it will keep doing this, also my check engine light just came on and auto zone said it could be O2 sensor, and ideas- note: when my car starts to get hot the heater gets really hot and when it kicks back down to normal my car starts to blow cooler air?????

First make sure your fan is working, if ok you can try the following, in any order you want, Disconnect heater core hoses, put water through them and see if its flowing, is it missfiring? you can also run a combustion leak test. you can get the tools at autozone or napa its cheap,

Valve on top of thermostat housing .

1999 oldmobile intrigue over heating. Heat not blowing hot

So I took it out myself today to see ? took what out ,to see what ?
Do the cooling fans work ? Could be the step motor that controls the temp. gauge . How are you determining that the vehicle is overheating ? Gauge on insturment cluster ? GM had bad step motors inside thier insturment cluster's . 2003 to 2006 ! Your best bet , take it to GM dealer .

if your mechanic would suggest taking the thermostat out i dont think to highly of him, i think after installing the waterpump they didnt purge the cooling system correctly, if you remove the thermostat your heater wont blow hot air and it may also cause your cooling system to run in an open loop and you will have them pesky lights on the dash driving you crazy, i would suggest having a different mechanic try to purge the system first

Possibilities:

Low coolant - check and refill if necessary
Thermostat is stuck shut - replace
Radiator clogged - clean fins of radiator. Have the radiator flushed.

Follow these steps:

http://99intrigue.shutterfly.com/waterpump

Sounds like your coolant temperature sensor has failed.

Make sure to use OEM parts and drain the air out of the cooling system. The 3.5 especially is very touchy regarding OEM and aftermarket waterpumps and thermostats for whatever reason. Simple solution to bleed out the air is to drive the car 5-10 mins without the pressure-cap.

sounds like a faulty sender unit not passing the right voltage which is causing the gauge to read high