I really think folks take the CoreTemp to seriously. If you read the article written by the guy who designed the CoreTemp software, he says as much himself. It really is very good reading and explains where the temps come from and how much credence you should pay those readings.
http://www.overclockers.com/articles1378/ AMD uses the TcaseMax which is the maximum temperature at the dead-center at the top of the processor core or the IHS which will ensure 100% stability and safety. Exceeding it isn't a big deal in most cases. Intel reports TJunctionMax which is the maximum temperature at the junction between the processor die and the PCB it sits on, this is usually much higher than the TCaseMax value. Exceeding this is a big deal and really should be seen as a meltdown warning. Wanna's is the first I have seen of a CPU crapping out at TcaseMax.
MY THEORY ON CORETEMP AND COOLING SOLUTIONS:
The other thing I believe, but am not sure of, is that since the DTS (Digital Themal Sensor) is located in the core itself and below the IHS, the temps are real time. The CPU Temp reading we all see is attached to the IHS. Therefore, I don't think that you will see a huge delta in Coretemp readings between cooling solutions until the cooler itself reaches heat saturation.
The air cooling and watercooling is attached to the IHS and therfore cools it only. It is only as good as its absorption rate. In other words, air and water both pull heat from the IHS and there won't be much difference between them at the coretemp per se. The CoreTemp will rise as work, frequency and voktage increase but as long as you can pull the heat away at a certain rate it will pretty much stay there.
What water buys you is a much higher saturation point. It can absorb and disperse a lot more heat than an air cooler. It will only effect the coretemp from that perspective. It will continue to pull heat from the IHS long after the Air Coller has reached saturation. Once you hit saturation CoreTemp rises rapidly. It is no differnt than a radiator on a car or motorcycle.
What I believe is that there is a tip over point where the cooling becomes overloaded and then you will see a big delta in cooling solutions. Both air and water will let the coretemp rise to a certain point and not exceed that point until saturation. Air will maintain about the same coretemp as water until it hits its saturation point much earlier and that is where water buys you the edge. It hits saturation much later.
All theory but I'd be interested in others folk's opinions. The only way to truly see this is with Phase change which actually cools the whole CPU to minus temperatures. What is the CoreTemp there?