System temp is the most useless reading ever.
It does not measure the actual air temperature in your case as everybody believes but it is the temperature of the monitor chip and thus depends on where that chip is located on the board. If it's close to heat sources you will get high system temps, if it's somerwhere on the edge of the board you will get low temps.
On my MSI K7N2-L the monitoring chip is located between the CPU socket, the AGP slot and the Northbridge. When I turn up my CPU fan the "system temp" is higher than my CPU temp at idle.