Just bought my second Bonnevile. This one is a 2000 SSEi. I noticed that the temperature goes higher than it should when its cold and the heater blows cold. Then all the sudden the temp drops to normal and the heater starts working. Is this a thermostat issue?

You have air in the cooling system. There'* a bleeder valve on the top of the thermostat housing. You will need to get the engine up to temp and then open that bleeder. Be careful, the coolant will be hot so have a rag over it to protect your self.

Just that simple? Do this prior to the temp dropping back down to normal or before?

Up to temp, nothing will come out until the thermostat opens, once you open the bleeder slightly it helps to rev the engine slightly either have someone hit the gas or just reach over and pull on the throttle cable mount

okay - I decided to fix this. I started the engine and was letting it idle to get to operating temp. Temp got to 240 and stat never opened (heat never worked). I got out of the car for a brief second and noticed steam/smoke coming from back of motor and what looked like water around some of the stuff (intake/injectors) on back of motor. I turned the car off and heard water boiling like crazy. I turned the key and temp was where it should be and heater was working. I started the car and seemed to run fine so I released the valve as described above. What happened? I hope I did not damage something with it getting that hot???

Your stat is bad for sure

Hopefully you blew a line from your heater core and not a gasket. Not sure on the */C'd models. You need to get back out and verify where this coolant is coming from.

Also for future reference never let it get that hot.... hope you didnt crack the heads or block for that matter.

On another note, I'm wondering why he is not getting heat from his heater core. His thermostat has no effect on coolant reaching the heater core, so why is his engine getting really hot, but no heat. I might have a clue. It actually happened to me the other day.
I left for a 2 hour drive, my temp reached normal, but I noticed I had no heat coming from vent. Next thing I know, my temp shot over 200. I pulled over and felt my upper radiator hose, it was luke warm, the radiator was cold, lower radiator hose was cold, BOTH heater core hoses were cold. Popped the radiator cap off, and I could see liquid near the top. Only thing I could think of was my cooling system had frozen over due to 10deg F temps over night.
I massaged the upper and lower radiator hoses until I seen the temp gauge drop. It wasn't until 49 miles later that my heater core finally let heat out.

Opinions?

I would use a coolant hydrometer and see what the protection level is of your coolant. If you've topped off your cooling system with water and not a 50/50 mix over the spring and summer, you may have diluted your protection.