Hi mate,
here reference I found: http://www.ti.com/lit/ds/symlink/lm35.pdf
I cannot give you a sure answer as I'm starting now to search for a temperature sensor, the LM 35 looks great beacuse you just have to go throug a simple math to get the result, I'll buy one and try.
connecting betwen GND and 5v is ok but you'll measure only from 2 to 150° C. Because A0 may analog read from 0 to 1023 linear corresponding 0 to 5V, I believe we will read with pitches of 0.5°C.
Infact Arduino read in pitches of 0.00488 Volts, or 4.88281mV; the LM35 will output 1500 mV at 155°, and linear down to 20 mV at 2° wich is A0 reading respectively 306 and 4. The temperature is therefore A0/2.
However minimum temperature with your connection is 2°.
Analog PWM outputs cannot be used for this.
to read negative temperature you need to put a negative voltage and adequate resistor. Arduino borad cannot power the LM35 in this case.
This said there should be a theoretical combination of resistors such as to make the LM35 powered between 1 and 5 volts (to its minimum of 4V) so as to have GND being relatively to the LM35 equal to -1V.
If we find such combination output readings would be shifted up by 1000mv or 205 pitches. The A0 reading would therefore be converted in temperature with this formula: A0/2-102.
If you get results in this area please give me shout!
Paolo