Depends highly on the mb.
For example, the Majority of BX based MB's read from the internal diode(yes, internal diode has flaws, but it is still far more accurate than a thermistor based solution). THe majority of i815E mb's also read from the diode.
For these mb's, they are fairly accurate(much more so than a thermistor).
Then there are problem child p3/celeron mbs. Most of these are based on VIA 133/133A mb's(some exceptions include the Gigabyte and Asus Boards). For example, the Soyo 6 and 7Vca's use thermistor's to measure cpu temp. On the 7vca, it is underneath the socket(no better than socket A), and on the 6vca, it is even worse. The thermistor sits about 1/3 of the way up from the bottom of the slot 1 connector(in other words, not even close to the cpu core).
So it really depends on the mb you get.
Mike