Not sure about the temp needle jumping around while driving, unless it could be the temp sensor malfunctioning, or there is a serious air bubble in the system. Has the coolant system been tampered with recently? Can you see any leaking? Is the smoke coming from the exhaust whiteish?
Do you know if there is any oil in the coolant (you should be able to see the oil sitting on top of the coolant I believe), or coolant in the oil (milky brown oil)?
When idling, does your fan come on? If you are unsure, locate the thermostat housing (follow the lower to the back of the motor) and unplug the switch on that housing. Stick ends of a paperclip in the holes and then turn your key in the car. The fan should come on. If not, the fan is dead, or there is a wiring issue. If it does come on, there is a problem with the fan switch most likely.
I am sure there will be other members chiming in soon to help as well. Just make sure you do not drive your vehicle while overheating, or you risk blowing the HG and possibly warping the head.