According to AA1Car.com, cars house one or two temperature sensors either in the intake manifolds of their thermostat housing or in their cylinder heads. The engine control unit uses the information from the sensor to maintain an optimum operating temperature as well as control fuel, ignition and drivetrain tasks.
About.com defines a temperature sensor as a variable resistance thermistor that changes resistance as the engine's coolant temperature changes. In a Positive Temperature Coefficient sensor, resistance increases with a rise in temperature while the converse is true of a Negative Temperature Coefficient one. Most cars have the Negative Temperature Coefficient sensor.