Just ran across this old thread as it is the only info on the net.
Rebuilding a 2000 Boxster S of mine in my shop that had an engine fire and had the same issue.
If you use the 2 wire sensor on a 4 wire DME you will get a coolant reading via OBD2 but not on the dash.
The fix is as follows:
If your car (read DME) is an original "4 wire" car then you need to use the 4 wire sensor and run them to the trunk area.
If you splice the two wire sensor in your dash will not read correctly as the 4 wire sensor spits out different ohms to the ECU vs the instrument cluster.
Hope this helps someone in another 8 years!
--Aaron