I have a 2001 S40. It's been my favorite car so far =)
I have had some issues, most of which have been routine maintenance OR been things that can go wrong on any car, so I don't want to scare you too much:
- cruise control has NEVER worked right, under warranty, but they've never gotten it fixed all the way. It works when it wants to.
- AC hose got a hole in it and the AC stopped cooling. My uncle is a mechanic who works on luxury imports so I just had to buy the hose and his dinner =) Hose was about $80 straight from Volvo parts. If I didn't have that connection, it would have been much more expensive
- AC sensor is funky here recently. It doesn't seem to sense the temp right anymore and will often turn itself on and off at will. I fixed that by just using the manual AC controls when it starts to flip on and off instead of using the sensor
Of course the usual tires, brake pads, headlights, etc that needed replaced
Also, the car takes a special oil filter that you won't find at discount oil change places. Plus, places that do have it will charge you extra for the filter. You can get around that by buying a bunch at AutoZone and bringing one with you, and they usually give you a $2 discount on the change. I run synethetic through, did a bunch of research at the time I bought teh car and my uncle recommended it because of the turbo engine. It's been great with that - its about $50 a change but I go 10k instead of 3k so it all works out evenly.
The battery is also much more expensive than a regular car, I had to replace that last month - it was $100, a special international Die Hard was the only one that fit the car. So yes parts are more expensive. Normal hoses are much cheaper, filters are cheaper, batteries are cheaper, etc. Things under the hood are put together strangely, so it makes it hard for someone at home to fix it. Like replacing one of the headlights involves removing the battery!
Would I buy another one? I LOVE my car, but our family usually drives only Honda/Acura (I had 3 before this Volvo) and I've never even had a hose go bad or anything. Plus when small things did go wrong, it was inexpensive to fix. So we'll likely look at another Honda/Acura next time just for that =)
Good luck!