CPU temperature fluctuation? (CoolnQuiet)
 

I have a phenom x4 965 cpu which has Cool&Quiet that basically lower the clock speed down to 800mhz when cpu is not in use.

When disabled, my CPU temps basically range from 40-45'c (3.4Ghz idle to gaming load)
Pretty sure that temperature is perfectly safe.

With C&Q enabled, my temp now fluctuate between 29'c - 48'c. (800mhz->2200mhz>3400mhz

So average temperature is definitely much lower. And I don't see any performance loss.

But I was wondering if it is actually better for the CPU to have a stable temperature than for it to constantly fluctuate almost 20'c even tho the average temp is lower.

Fluctuates are fine

Your system is working as intended. If you disable C&Q, it basically telling the CPU to run at full clock rate all the time. When C&Q is enabled, it lowers the CPU clock to save power and temps.