I am thinking of using a different temp sensor now.
I have one on my HTPC and have never had an issue with it. It has 3 sensors and the ability to control 3 fans according to the coresponding sensor reading (automatic only, unfortunatly). I would probably use it to display CPU = Cell broadband, VGA = RSX, and Case = either the power supply or the temp of exaust air. The lcd itself is compact and might be able to fit in the space between the top cover and the card reader (hopefully without removing it), if I cut a rectangular hole in the inner plastic casing. The main reason I'm leaning this way is because the sensors are very thin with just a small bump at the tip. They might be small enough to fit under the heat spreader of the RSX and Cell providing a more accurate reading of the die temps, something baargle pointed out. I worry the LCD screen might not be bright enough to be seen through the top cover, but I will check and get back.
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I just checked. It is not very bright, but it's bright enough to see in a lit room when you're close enough to read the temps. So it will do. There is 1/2 inch of dead space above the card reader for it to go. There are three standoffs that provide support for the card reader and it looks like 1 is in the way, maybe 2. They will need to be shaved off some on one side (not necessarily completly removed). I will start the mod soon, perhaps I will make a tutorial. I will have to remember to take pictures.
I just checked the temp controller in my HTPC, also taking the chance to clean the dust out. It is bigger than I was thinking. It's maybe 1" thick. There are 3 voltage regulators for the fans and 3 sensor pins that can be bent over to make it thinner, bringing it to aprox 3/4" total. If I cut a hole in the top casing and lay the lcd directly against the inside of the top cover then I can gleen a little more clearance. There might be just enough room. If I have to, I will take the card reader out, but I don't want to reduce functionality. We'll see.