In reply to dean1484:
Speedtuning has a remap for 300 bucks that gets you close to 270 hp or so. The gearing is tall and the mitsu 16t runs out of puff at 5k so it is torque that matters anyway. With a 2.5" or 3" exhaust and the remap you end up solidly north of 300 fllbs.
I have a 1995 855 t5r with the slushbox and it is a great touring car. It can point a squirt pretty rapidly but it does not handle well by any stretch. I have the stock springs and koni yellows with the IPD anti sway bars. I left the stock springs in as the ride is bashy already and I did not want to give up any load capacity. It is very traction limited.
The strength of the car is on the highway. It pulls mountain passes like a lear jet. I am at 160k with 60k on the remap and it sounds exactly the same as when I bought it (90k) and still using a quart per 3-4k. It is very well put together. Read all about them at vovloseed.com. Not a great site but search the threads and all the fixes and tweaks are to be found.
http://www.speedtuningusa.com/products/dyno/kf-volvo-t5-225ps-300nm.htm
In regards to the AWD vs FWD, it really is just the angle gear that gives problems, but they blow up on people all the time. The FWD slush box works fine, it does not need to shift very often due to the tall gearing and the programming is generally trying to keep from shifting which I like. It is easy to live with as long as one does not try and push the car on twisty roads.
The rear axle set up on the AWD cars was lifted out of RWD cars, so it is heavy and under-stressed. It is also limited slip, but only a little bit of power goes back there, unless the front looses traction, then it all goes back and the angle gear blows up. It really is a kluge of a system. The haldex system on the 2002-2007 v70awd and sv70r is much better, but they still blow up the angle gears.
The manual FWD boxed are really good, super tough, and there are zillions of them in junk yards because all the 93-00 cars use the same one (year to year revisions but the same box).
ipd.com for the sways which help alott.