Not all thermostats work in an ideal manner.
When an engine warms up, the thermostat stays closed, allowing the engine to warm up, and the coolant to get hot. Once the engine gets up to normal operating temperature, the coolant is hot and the thermostat opens. However, the thermostat might not stay fully open, some of them will vary the amount they stay open, in effect trying to maintain the engine temperature, not letting it overheat, but also not letting it run cold. It can be this 'cycling' that causes the temperature gauge to show the engine as changing in temperature, even though the thermostat is responding to it.
You can also have the opposite, with a thermostat that just stays fully open when hot, and then you might still have a gauge that goes up and down slightly, because the engine temperature is changing based on conditions, how much air is going through the radiator, the load of the fan clutch, etc. but the thermostat isn't doing anything to try and keep the temperature optimal.
Only the most ideal thermostats (like the $20+ Motorcrafts) will actually work in an active manner and do so fast enough to actually keep the temperature gauge needle in the middle of the gauge the majority of the time. Most of the inexpensive thermostats just stay open, or do some minor temperature regulation.
Generally though, for the money, a $5 195 degree Stat Superstat works fine, and you can replace it every year or two and still come out ahead over the cost of a factory one. The Motorcraft 'stats are great, but at $20+ a pop, when they go out, it sucks to keep dropping money on something that works well but doesn't last very long.
7 years is a long time even for 150,000 mile coolant newer vehicles come with. The old stuff that Explorers came with isn't made to go that long.
Go to Napa and get a gallon of either Zerex Green (if your coolant is green, which is probably is) or Zerex G-05 (if your coolant is yellow) and a 195 degree Superstat and gasket. Go to the grocery store and get three gallons or more of distilled water. Drain the coolant, drain the overflow tank, and then refill the system with two gallons of distilled water. Leave the radiator cap off or put it on but loose. Start the engine and idle it until the temp needle gets to the middle and the temp goes up then down, indicating the thermostat opened. Let the engine cool until it's cold. Drain the water, change the thermostat. Notice the state of the cooling system by how clean the inside of the engine is. If it's clean and light green that's good. If it's gunked up and dark brown that's bad. If it's really messy in there you may want to put the old thermostat back in and do flushes with a hose. Otherwise if it's clean, just put in the new thermostat and refill with the gallon of coolant and gallon of distilled water (putting the rest in the overflow tank), then follow the burp procedure to remove trapped air bubbles (leave radiator cap off, start engine, run until needle goes up and down showing thermostat opens), then allow to cool again, top off coolant in the radiator, and repeat the burp procedure one more time.
