You actually want the temperature sensor in the radiator side of the thermostat. Otherwise the fan will be on most of the time. With it in the block the thermostat will keep the block temperature regulated pretty well until it starts to overheat. If you put it in the radiator or on the downstream side of the thermostat the fan will only kick on when the water in the radiator gets hot, so it will cycle better. This is the way my BMW is built.
The fan thermostatic relay I have is an all in 1 unit with an adjustment screw on the side and a thermocouple that you attach halfway down the radiator. The fan shuts off at highway speeds when the air flow is enough to keep the radiator cool, and kicks back on at low speeds or stopped when the radiator heats back up. It saves wear on the fan over just having the thing run when the block temp is over 180 degrees.
