You call what needs to be done with the 850 an upgrade....I call it basic maitenance. Eventually you pay the piper. Your miles are where the bucks come in but you're good for another 100K or so before major stuff starts costing you again. On the other hand, I see where you're going with the new car (if you can actually find the model you mention, so make sure before you plunge). It will be under warranty for a few years so paying the piper is at least delayed. 3 years ago we sold our 850 wagon at 140K (it needed a timing belt, brakes, work on the A/C) for the same reasons you're considering, and bought the '04 V70 that had just come out. We can't be happier, but back then I didn't know about these boards and many a time I've regretted it because she (the '94) was a beauty and never let us down as long as we kept up with the maintenance. I missed her so much in fact that last year I sold my '01 Mazda to buy a '98 S70. My wife drives the '04 V70. Anyway, this is my story whether or not it will help you with your decision, I don't know.
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1998 S70 T5 Emarald Green Metallic, 2004 V70 2.5T Ruby Red, Previous Owner of Black '94 850 Turbo Wagon. My cars have been running so well lately they've got me worried.

I don't believe there is such a thing as a base V70 with stick shift - it exists only in theory (and in Euro delivery at a much higher price), not in the real world. You should confirm it's availability if that's critical to the analysis.

If you are a person who keeps cars for more than just a few years, the operating cost of the new car will probably average out to be about the same as the old one (somewhere like 1200-2500 per year excluding fuel and insurance). On average many cars of similar price range are similar in operating costs because all need more or less the same maintenance - the variation is more the luck and conditions of use of the individual example you have.

So then the question comes down to - would you get lots of enjoyment from a new car? have the money up front and not needed for kids in college or some other use? does the old one have specific problems that keep you from using it for what you need (for instance is it good enough for road trips if you typically do them)? is the old one lacking some feature you think is really important?

My point (and of course this is just my own personal view) is that I usually wouldn't replace a car without a specific reason.