[steveb]

how hot are the hoses getting ? I had problems with the 20valve yesterday and think it had an air lock, i didn't use the bleed screw on the hose as it wouldn't move, so left rad cap off, heater on hot rev engine at about 3000rpm till the fan cut in this got rid of my air lock and the heater is hot today. If your hoses are hot (both) see if the flap that directs the heat over the matrix is working, you need to take the glove box or drivers shelf out to see it

You have a new stat. is the heater hot while not driving the car, then gets cold when driving ? if yes try blocking the lower half of the rad off with card, it could well be over cooling