Just got a new T520, i5-2520, 8GB, SSD, 1600x900 lcd, really nice. One thing I noticed right away was that the fan comes on almost immediately and never shuts off, even while just idling. So I updated the BIOS to 1.37, disabled the NVidia chip and running just Intel Integrated graphics, but still no change.

HWMonitor and TPFanControl (Bios mode) show the CPU temp at 37C. So why have the fan on at this temp?

Could it be that the fan is always on because of heat from another component like the QM67 chip?
Unfortunately, TPFanControl doesn't show temperatures for any component other than the CPU, so difficult to tell.

Anyone have any comments as to why would the fan be always on with a such a low CPU temp?

It is probably designed to never turn off. I don't think it is because of chipset or anything like that. If it were me I would stop worrying about it and use Smart mode 1 or 2 on tpfancontrol.

I've been doing some testing, with light CPU load, just web browsing, reading/answering emails, etc.
Running TPFanControl in mode 2.

CPU temp rarely goes above 40C, fan never comes on. However, in maybe 10-15 mins of use the underside of the laptop, especially immediately below the trackpad, gets quite warm. If I then put TPFanControl in BIOS mode, the fan comes on immediately at ~2500RPM (faster and louder than usual), even though the CPU temp was below 40C. I might be wrong but I think the fan comes on not for the CPU but for something else that's getting hot.

IDK I think it might be dangerous to run TPFanControl on a T520 because TPFanControl only detect the CPU temp and nothing else. It appears, to me anyway, that the fan is always on in these machines not to cool the CPU but to cool some other component.

I wonder why TPFanControl only detects CPU temps on the T520? IIRC on my T60 it detected a whole bunch of system temps.

tpfancontrol does only sees the CPU temp on T410/T410s/T510/W510 as well. Maybe the program is due for an update.

Did you do a BIOS Update already?