You do need to boil your cornstarch/liquid combination for the cornstarch to be able to do its job and thicken the liquid. All my recipes that use cornstarch as a thickener tell you to mix the cornstarch with cool or room temp liquid, stir into your pot, and then bring to a boil and cook until thickened.
Here are some tips for working with cornstarch...maybe one of them will give you a clue to why your gravy thickens and then gets watery...the one about stirring gently is interesting as is the one about overcooking...
http://voices.yahoo.com/tips-cooking...h-8774599.html