Inside walls are best BUT did you do this from your manual. And yes it can make a difference since inside walls connect to the attic or basement usually.
If the hole in the wall is too big, insulate it
Using a non-flammable material in order to
Avoid air draughts behind the thermostat
Your manual http://customer.honeywell.com/techli...0s/69-1800.pdf
Did you do this setting?
3 For optimal heating control, use the setting that matches your system as
Follows: 2=30 min (steam, gravity), 3=20 min (hot water, 90%+ high-efficiency
Furnace), 4=15 min (gas or oil), 5=12 min (alternate setting for gas
Or oil), 6=10 min (electric).
I for one like accuracy but this thermostat makes no allowance to adjust the temperature display. You will have to spend bigger $$$ to get on that does.