When is it "too hot"?

When is the temperature of a car too hot?My 360 in my Dusters water temp gauge reads 200 deg F,and it reaches that temp pretty quick.Just going to the gas station a few blocks way and its already at 200 deg.The stock gauge reads a little above 120,but I know not to really go by that gauge.Im just concerned that if it gets this hot just going down the street,i wonder how hot it will get if I go further.Im not sure what temp the thermostat is,but i do have the big V8 radiator,and a flexi-lite fan,coolant is brand new and clean,but I dont have a shroud.Would a shroud really help?I was thinking of also later getting a vicous fan,and a shroud if this will help.