My CP9125 Pocket Code Scanner has detected the subject fault.
The car is hesitating and surging on moderate acceleration, behaving as if the turbo was turning on and off.
I am a competent mechanic on older Volvos and other cars, but never had a turbo before. What and where is this sensor; what is it sensing?
Anybody have an idea what I should look for?

The boost pressure sensor (map) is located in the plastic hose that goes to the throttle body. Single 2 wire conector. The turbo control valve (very common failure) is attached to the air filter box, 3 hoses and a conector. When it fails, car surges under boost.

Thanks to all who have responded. I pulled apart a good portion of the system on Sat, found no glaring vacuum leak suspects, made a diagram of the system, tested the solenoid valve with 3 small hoses mounted on the air filter box, tested another solenoid valve with 2 small hoses mounted on the rad fan shield. Pulled out the 2 sensors in the large hose from intercooler to throttle body, they looked alright, no corrosion; one has 3 wires and a tiny hole inside which I presume is a pressure transducer, the other has 2 wires and they come together inside which I presume is a temperature sensing thermocouple.
My next question is about the solenoid valve with 3 small hoses. One hose branches to the two turbos, the second goes to the large hose downstream of the air mass flow meter (minimal vacuum), and the third goes to the large hose downstream of the turbos (high pressure). "Solenoid on" connects minimal vacuum to the turbos. "Solenoid off" connects high pressure to the turbos. I ran the car with the connector unplugged, solenoid off, and it ran smooth but slow, apparently no turbocharging.
Q1 = What is the purpose or function of the small hose branching to the twin turbos?
There is a large pressure operated valve with 1" bypass hoses connecting between the large 3 or 4" hose downstream of the air mass flow meter and the large 3-4" hose between the intercooler and the throttle body. I did not examine this valve because the hose clamps were crimped.
Q2 = What is the purpose or function of this valve and bypass hose? Is this the waste gate? Does excess manifold pressure cause it to open and bypass the turbos? Should I test it? If it was fluttering open and closed, would this cause the surging? Would this trip on the fault code P0236? Or would excess manifold pressure be caused by misbehavior of that 3 way solenoid?

Tribleb has suggested replacing the boost sensor; thanks much for the tip, this is a great forum!
There are 2 sensors before the throttle module.
Which one is the boost sensor? 2 wires or 3? Does it sense pressure or temperature?

Related questions:
What is the purpose or function of the small hose that takes manifold pressure and branches off to both turbos? (The little 3-way solenoid valve is working)

What is the purpose or function of the 1" diameter hose with a pressure operated valve in it that connects between both the 4" plastic hoses? Seems to be a bypass, but I don't understand why it's there.

It was the MAP sensor. After the initial fault code, I began to get a second fault code P0237 which was Booster Sensor Low Range, so I figured its time to throw parts at it and see what sticks.

I found lots of useful parts schematic drawings on myswedishparts.com
I found useful images of parts on voparts.com
Using those together I was able to figure out which part was the MAP sensor and where it was.

I got the MAP sensor from the local dealer for $85 with a 10% off coupon, installed it, and was able to immediately erase the codes, and the check engine light switched off. It runs smooth now, no jerkiness on slow startaway or random surging at slow acceleration. Problem solved, thanks all.

I learned the turbochargers have a vacuum or pressure controlled mechanical device on them, operated by pressure or vacuum from the intake hoses, and controlled by a switching valve attached to the air cleaner box, but was not able to learn how that device worked inside the turbos. Apparently it turns the turbo boost on and off. My car was apparently doing this at inappropriate moments.

I happen to like turbos and MAP sensors. Neither of which are prone to failure. The vacuum lines, on the other hand, are. Check any and all vacuum lines for cracking and a soft feel, especially at the 90 degree corners and elbows. More than likely a vacuum leak.
It is MUCH cheaper to trouble shoot a vacuum leak than replacing a sensor.

Klaus
--
The 164 has a new home, all I am left with are a 95 854T and a 98 V70R :)

Here some information that I have on the sensor from All Data.

Description and Operation

Manifold Absolute Pressure (MAP) Sensor, Intake (Turbocharged Engines Only, 2002-2004)

The manifold absolute pressure (MAP) sensor detects the pressure in the intake manifold downstream of the charge air cooler (CAC). The signal from the sensor is primarily used by the engine control module (ECM) to check that the correct boost pressure is reached. The boost pressure is governed by the turbocharger (TC) control valve.

The sensor, which is a piezo resistor, is grounded in the control module and supplied with 5 V from the control module.

The resistance in the sensor changes depending on the pressure in the intake manifold, giving a signal of 0 - 5 V . Low pressure results in low voltage, high pressure in high voltage.

The engine control module (ECM) can diagnose the manifold absolute pressure (MAP) sensor. The signal can be read using VADIS.

The manifold absolute pressure (MAP) sensor is in the intake hose for the throttle body (TB).


--
David Hunter

I don't know these new computer reliant systems either, but my code book has P0236 pretty much the same but words it slightly different: "Manifold absolute pressure (MAP) sensor A, TC system - range/performance problem".

The probable cause is listed as: "Intake/exhaust leak, hose connection(s), MAP sensor".
With both hesitation and surging, I'd guess the sensor was bad. Don't know where it's located or how much.