From the datasheet:
"Unlike taditional thermal devices, the DTS (Digital thermal sensor) will output a temperature relative to the maximum supported operating temperature of the processor (Tj,max). (...)The temperature returned by the DTS will always be at or below Tj,max. Over temperature conditions are detectable via an Out Of Spec status bit.(...)"
This quote is from the thermal specifications of Core Duo and because of the same thermal control circuit and thermal monitors it shares with Core 2 Duo, we can assume that this stil is valid for Core 2 Duo. If you read the datasheet of Core 2 Duo, it is written that the DTS output is relative to the max operating temperature of the core and of course this is not TCaseMax because the core of the Cpu is a lot hotter than the case of the processor.
Also this quote is for the people who likes speedfan or mobo reported temperatures:
"(...) The reading of the external thermal sensor (on the motherboard) connected to the processor thermal diode signals, will not necessarly reflect the temperature of the hottest location on the die. This is due to inaccuracies in the external thermal sensor, on-die temperature gradients between the location of the thermal diode and the hottest location on the die, and time based variations in the die temperature measurement. (...)"
I'm not saying that the mobo temp is not correct, all i'm saying is that, even if the thermal sensor calibration is perfect, its temperature will be different than the hottest temperature in the core because the thermal diode is integrated in a location more cold than the location where the DTS is. So both temperatures are correct if you understand them and none of them is comparable with Tcase.