Yes a faulty temp sensor is a common problem but if you got a reading on the dash when heating it, then you have the wrong sensor.
The ECU Sensor is separate to sensor for the dash gauge (usually it is next to the dash sensor
Have a look at http://www.britishv8.org/Articles/Rover-14CUX-EFI.htm to see info and pic for the Temp Sensor as well as more info about ecu wiring.
amr 1097 is the ABS ECU, not the engine ECU, so you are looking at the wrong ECU (see above link for what you should be looking for)