OBDII Code P1296, new coolant temp sensor right?

On my friends 02' Golf 2.0L, it had the check engine light on...hooked up the trusty Auto-Xray and showed P1296. Looked it up on the net and it said "Cooling System Malfuntion". Now, when I drove the car around, I noticed the coolant temp guage DID NOT MOVE. So, I'm assuming the coolant temp sensor is shot. Where is it at on the 2.0L?
Thanks

yup the cheap 7.00 sensor is bad, dont forget a new o-ring