wats it like on the freeway? if it heats up on the freeway its normally a good indication of a blocked radiator
My other car had a bit of an overheating problem lately, was a dead thermostat. On the highway the temperature guage was just as hot as it would be at idle, purely because the water wasnt flowing through the radiator.
Thermostat can be a good place to start, its cheap and easy to change. If the problem has come on progressively over a long period its a good chance its radiator related. If it comes on quite suddenly (e.g a week) its probably a good chance to be thermostat. These are just my findings with my cooling problems.
If you are really cheap pull the thermostat out and see if it makes any significant difference. If it does, go buy a new one.
We had a ke55 bush basher, it was very difficult to make overheat. After 2 minutes chained to a tree doing a burnout on a concrete pad, it finally started to get up to about 7/8's temp (read of course by the bent upwards needle).
It might also be an idea to try an independant temperature guage, to be sure that it is truely overheating. Im sure the in dash one is getting a tad old now anyway.