The interior temperature sensor is located behind a tiny grille which is
next to the dash switches. My car is Right-hand drive, and it's on the
left-hand side row of switches (Left of the steering wheel), along with
heated window/mirror switch, TRACS switch e.t.c.
The grille in question is the same size as one of these switches.
To access it, remove the radio (push in the 2 rectangular bits at the bottom
of the radio panel, and 2 handles will spring out, pull 'em!), then you can
reach round the back of the sensor, and remove it. It's on a plug, and
replacing it will be easy. 'Sup to you to decide if that's the cause of the
fault though.
If your internal temp readout has broken, this sensor is completely
different, and the sensor for this is located on the lower-front bumper
(front spoiler if you like), fairly close to where front foglights are
mounted. It's a 2-wire device, but no plug nearby. You can cut & join the
wires as long as you cover the joint in adhesive-lined heatshrink or similar
when you've finished.
Hope this helps.
Cheers for now.
Joe Landy
Peterborough
UK.
1997 V70 TDI 227,000 miles