The thermostat and the grey CTS on my b7 are both inoperative (VCDS reports blank values for each during logging) and my MPG in it is much worse than in my b6. Plus the tailpipes are "smoked" from it running rich due to it dropping into "safe mode" since the thermostat isn't able to be controlled and its receiving no value from the CTS. Either way it has significantly affected my gas mileage and the heater isn't quite as hot as it should be. Its also warming up very slowly due to the Thermostat being stuck open and always cycling Coolant through the radiator. Occasionally during highway driving the engine temp drops below 90C also which is no bueno!

I would follow Jason's advice above and try to find out if either of the CTSs or the thermostat are faulty. If you have VCDS check out measuring blocks 130, 131, and 132. One of those has the Thermostat Duty Cycle, and the temp sensor readouts.