This is an outstanding car. Having owned four Volvos prior to this one (144, 164, 245, P1800), I have to say that the S40 (T5, AWD, 6-speed) is my favorite. The drivetrain components are solid: strong acceleration, consistent stopping power, and smooth shifting make for an enjoyable driving experience. Unlike the older turbos, this one is not subject to the same kind of shock-cooling that damaged earlier models back in the 80s. The clutch takes some getting used to. It is very light, but it grabs rather quickly. Having endured intense snow in Denver this year, the AWD came in rather handy. With DTSC, it handled beautifully.
More interior space, more space between the brake and the accelerator. I've needed three or four "software updates." This car is like a computer on four wheels. Just be sure that you take care of software revisions before the car goes out of warranty. Mucho $$$ if you wait too long.