Alright, why is this thing overheating?

Steve I'd first verify that the gauge is reading correctly. I know it's an AutoMeter but you just never know. I have one of those infrared temp guns I use to check temp gauge accuracy with. If it is 250 degrees, that is extremely hot and you will know it as soon as you pop the hood a blast of hot air will hit you.

Other than that make sure you have good air movement through the radiator. Make sure the clutch isn't bad on the fan. Also as 71dartguy asked, how much is the fan sticking into the shroud? It should be about 3/4 to 1 inch from the radiator (in other words most of it should be inside the shroud) and should have just enough clearance around the fan blade to clear the shroud.