My girlfriends 95 lagacy wagon started overheating she was driving gently and not getting on it... going up a slight hill at 2500 rps gets to top of icon downshift engine goes to 3k rpm temp guage dropsto normal.

You shouldn't lug the engine down, regardless that shouldn't cause it to overheat. I'd first check to make sure it isn't low on coolant. If it's not low on coolant the radiator may be partially clogged. It's probably not a headgasket problem. My outback was doing the same thing, increased RPMs increases coolant flow and thus cooling. With a partially clogged radiator that's the difference between overheating and not overheating. Replacing the radiator and installing a new OEM subaru thermostat fixed the problem for me.

sounds low on coolant.

 

simple stuff that takes a few seconds:

1. check radiator - is it low on coolant?

2. when it starts to run hot - are the fans coming on?

3. any leaks?

4. any bubbles in the overflow tank while idling?

 

after that, work and parts: 

 

1. radiator cap - have it tested or replace with Subaru.

2. thermostat - you can test it by boiling it or make sure it's a Subaru tstat or swap with your other Subaru to test

3. radiator - only bad one i had i pulled and ran a hose through it and compared it to a radiator in my garage - the one bad radiator i had would just trickle out the other side.  i tried hitting it with a temp gun but the readings were so all over the place it wasn't consistent enough to tell anything.

4. radiator where the radiator cap seals - if they're corroded/deteriorated bad enough the cap won't seal - but that's very rare i believe

5.  if all that checks out...headgaskets?

I would check fluid level first. If that isn't a problem, the I would first see if you have any info on when the timing belt was done. Make sure the timing belt isn't contaminated with antifreze/oil making the belt slip

Low coolant would be my first guess.

 

How old is the thermostat? Any idea if its Subaru/OE equivalent?