MIL is on

Are you sure it was not a temperature sensor? Does the water temp idiot gauge indicate proper temp? On my 2003 I have to use Vagcom to clear out some error codes before warning lights will go away. If your water temp sensor is not generating the correct values to the engine management system your car is not going to run properly. If your thermostat is stuck open your car may never warm up which will cause issues.

Thermostats fail all the time on these. The code probably was cooling system performance/malfunction. the engine takes too long to warm up, increasing emissions.

The temperature sensor was replaced in April 2006 and approximately

It indicates 90 degrees Celsius, that is the needle is vertical. It takes approximately 6 minutes for the needle to go vertical.

So?

I'd suggest Jim's advice...

So the answer is no to the temperature sensor. Have you checked out the sensor to see if it meets book values? The Bentley repair manual show a procedure to check that also requires a Vagcom/VCDS. So your first sensor may have lasted 3-4 years depending on when your car was made. Maybe second sensor did not last as long. Hard to know without going through the book testing procedure.

Note that VW has a water temp idiot gauge. It will indicate 90 even if the water is hotter or colder within a range. It reduces the amount of complaints service techs receive of "my car is running hot" or "my car is running cold." You need a diagnostic tool like Vagcom to read what the temp really is.

Yes I think I have seen a light come on due to a faulty thermostat.

See if these codes have popped up.

The code is P2181.

What effect does a "temperature below control range" have on the performance of the engine?

First guess is the engine thinks it is cold. It runs a richer mixture. Catalytic onverter eventually burns up because of excessively rich mixture.

Something might telling the ECM that the temperature is not getting hot enough quickly enough or maybe too hot.

There also have been cases where coolant seeped out of the temp sender seal and corroded the pins on the connector causing erronious readings. not enough leaked to cause a leaking problem.