It's incredibly versatile with ample space and the 4C suspension setup, and has tremendous performance in third and fourth gear. Lag is noticeable at low RPM, particularly in first and second gear, but very few cars of any stripe can stay with this one once it gets going. It also boasts the best (support, comfort) seats I've ever sat in (my wife concurs), and has a pleasing design inside and out. Many a BMV/MB/Audi have watched my back end disappear in the distance, and the shocked looks from SUV drivers expecting to blow my slow Volvo wagon off the road remain priceless. Also has a great NAV system and shifter. All of this refers to the MT: beware the AT (GT), it's much slower.
Performance is awesome, even more so due to the fact that other drivers don't expect it. Close- ratio shifter (MT) is surprisingly precise and useful in getting max performance out of the car. Interior (Nordkap in mine) is beautiful and supremely comfortable. Navigation system is excellent.
The 4C suspension setup on '04 models is unpredictable--it's more of a beta than ready- for-release. Much improved on the '05, or so I've heard. Some interior components are a bit cheap-- the new S40 is actually superior here. High-beams are utterly useless and the only true flaw in this vehicle.