I don't think anyone has mentioned it so far but input conditioning should be used to position the signal such that the entire ADC range is used.
For example, between -10°C to +50°C, the
KTY81/110 returns 747R to 1209R and 1000R at 25°C if the sensor is provided with 1mA. Assuming a 1000R bias resistor and 2Vref, then the mid-point of the divider only moves between 860mV and 1090mV or between 438 and 560 in (10 bit) ADC values without any range maximization. Unfortunately, the ATmega328 only provides a 1.1Vref which is 0.55mA to the sensor thus the resistances in Table 7 of the PDF will be different.
Whether a diode (-2.2mV/°C) or diode-connected-transistor (-???mV/°C) is used instead, ADC range maximization should still be needed.
See "Using a 2n2222 as Temp. Sensor"
here. A summing amplifier is used to sum the raw signal with a counter voltage (via offset pot) to position the 0°C point and gain (via feed-back pot) to maximize the output range. Although, you probably can remove the need for a negative offset adjustment voltage if you position 0°C to be up at a 1/6th of the Vref.
Also, the sensor may not be linear so you'll have to compensate via lookup table or more complex formula.