My Tenere is fine on the open road doing over 100km/h but when I am in town it surges particularly in third gear but even in fourth and fifth gears. Someone said that this is normal but I would like a second opinion.

sorry, i don't understand. what do you mean when you say 'she surges'?
can you describe it more?
klaus

It kind of coughs. Not really severely like with a backfire (although it does do this when I take my hand off the throttle). It still goes but makes things unlpleasant.

Bryce - I recently had a similar experience with uneven running at about 60-80 kmh with occasional backfires on deceleration.

I found two problems which needed fixing:
1) I replaced one of the inlet manifold rubbers (which connect the carby to the engine), as one of the rubbers had started to split away from the metal mounting ring which attaches it to the engine block (this seems to be a bit of a common problem with XT's), and was therefore allowing air into the mixture. I found out that it was leaking by idling the engine and spraying carby cleaner at the manifolds. If the engine note alters, it means that you are sucking in carby cleaner, hence there must be a leak. (remember to clean the spray off afterwards, I dont think it does the rubber any good if left on...)
(NB A leak can also be caused by overtightened hose clips on the rubbers).
2) I reset the pilot air screw in the base of the primary carb. Its a sod to get at, but you can screw this all the way in, then adjust it slowly outwards until the engine idles smoothly (about two and a half turns outwards for mine). Dont ask me why this affects the running of the engine at higher revs!
Hope this helps - it might also be worth checking the setting of the secondary carb, ie how far is the throttle opened before the secondary carb starts to open? (The CLYMER manual gives the correct setting for this)- at one point, I had mine incorrectly set so that the secondary was opening up almost as soon as you touched the throttle, which meant that the engine was running much too rich.
Good luck - Connor.

A common found problem is also in the silencer : soon or later the "spark arrestor" wire mesh in the inner silencer "clogs up" and create engine problems ..in worst cases even seem to have the motor seized !

Try to remove the inner silencer (is bolted on the outside, but normally it's hard to remove..)