How can I get System Monitor Indicator to display temperature?

System Monitor Indicator is quite simple / flexible. You can add basically any script as custom sensor. The output it produces will then appear where you put its placeholder. I am using this to extract information from the output of sensors like this:

sensors | grep temp1 | awk '{print $2}' | sed 's/+//' 

to exctract the temperature or

sensors | grep fan1 | awk '{print $2}'

to extract the fan speed.

Just click on New, enter a name and a description and the respective lines from above under Command as shown here:

PS: After upgrading from Ubuntu 12.04 to 14.04 the tool seemed to have problems to read the configuration file, resulting in a crash when I tried to add sensors. Removing .indicator-sysmonitor.json from my home directory fixed this.