The usual sensor for the four-cylinder engine has a red insulator under the terminal, judging by the ones offered by Rover specialists. But my car's gauge (2000 TC series 2) over-read with a red one even after I replaced the voltage stabiliser. A sensor with a black insulator gave a slightly lower reading so I have stuck with that, but it's still a bit too high which suggests my gauge needs a tweak of some sort. An infra-red laser thermometer gun showed the engine to be running at just the right temperature when aimed at the thermostat housing.
My car's previous sensor, a red one, seemed to make the gauge read correctly for a few years after I bought the car but gradually the needle became more reluctant to reach the middle of the gauge until eventually it just stayed on cold. This continued after I replaced the thermostat; the old stat of course was OK, as shown by a healthy heater output and that laser thermometer. I would love to find a sensor that makes my gauge read correctly but so far I've drawn a blank.