Yeah, that's typical.
Abit used to ship a little thermocouple with their BX6 boards that you would tape (teflon?) right near the core of the CPU. That was probably pretty accurate IMHO. The methods used by most motherboards though often aren't that great. As was said above, just use it as an indication of where you're at. Your CPU should be in the 40-60C range (regardless) and your system should be down in the 20-30C range. Watch your system for a while, and take note of where your temperatures tend to fall, then set your alarms just above that.
If your motherboard is reporting way out of line, then you can always compensate for it. For instance, if you start cold and enter the system BIOS, you should expect your CPU to be at about 35-40C after just a few seconds. If it's reading 60C or more, then it's probably off by 20C+. Likewise, your system temperature should be around room temperature for a short time, assuming the machine has been off for a while.
I once put together a system with an Abit BE6-2 and that board had a serious problem if you used an OEM processor with a metal heatsink retaining clip. It would report temperatures from a cold start at over 120C!!
I rarely pay attention to temperature readings once the machine is up and stable. If the system is running, the system is running. If you're an "aware" enough user, you don't need an alarm to tell you when a fan is starting to die. Your ears can tell you more about a machine than most motherboard monitoring applications.
Slackmaster 2000