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The tranny in the FWD 850 is known to clunk a bit when shifting into R. My tranny did that when I first got it a couple years ago. The reason I didn't panic was because every 850 I've ever driven clunked to some degree (some worse than others, I've driven 4 other 850's).
There is no official specified drain interval from Volvo. Volvo suggests that a mechanic inspect the ATF at every service, fill if necessary, and flush and fill if necessary. I don't really like this because unless a sample of ATF is analyzed (BTW, you can get ATF analyzed for about $20 Canadian), there really isn't a way to make sure the ATF is still good. If the ATF is dark brown and smells burnt, it's pretty much ready for recycling/disposal. But the Haynes Manual, as well as every Volvo dealership I've ever asked, recommends that the ATF should be changed every 60,000 miles or 6 years, whichever comes first.
About 3 years ago, I did a flush and fill of ATF in my tranny with 12 quarts of AMSOIL 100% Synthetic ATF, back before I became a licensed distributor. Let me just say, it was big bucks, but money well spent. Since then, no more clunking. Other positive things I've noticed are slightly better performance (only noticeable by seat of the pants and on a Dynojet Dynanometer) and slightly better fuel mileage. Maybe not as good as 2 mpg, but I did notice an increase. And after 3 years, the ATF is still bright red, the way it should be in my opinion. I had the 4 year old Dexron III from the factory with about 55,000 miles analyzed and it obviously failed. I had my 3 year old 40,000 mile AMSOIL ATF analyzed a couple weeks ago, and it was still well within specs. And because I have increased hp to about 220 at the wheels, as well as about 220+ft.lbs of torque recently, as well as doing up a custom chip for the car before the end of the season, hopefully hitting 290hp and 290ft.lbs of torque at the engine or about 255-260 at the wheels, I'm planning on changing the ATF more often now, say every 3-4 years. I may be considered a stickler when it comes to ATF to some on this board, but hey, I'd rather spend an extra $150 Canadian every 3-4 years, than have to replace a seemingly known underdesigned tranny.
So the first thing I recommend is getting your tranny flushed, preferably with a synthetic ATF such as AMSOIL's, or Mobil if you can't find AMSOIL easily enough. It may not be all that easy to find someone locally that distributes AMSOIL, but I'm sure you'll find people like me on the net, or even order straight from AMSOIL at their site (www.amsoil.com). An average price for a quart of AMSOIL Synthetic ATF is $14.50 Canadian. Depending on order size, one can get this price down to as low as $11.50 per quart.
Another thing I've learned through experience is shifting the tranny in a way to somewhat prevent the clunking. Before I flushed and filled my ATF, I kinda worked out a way to shift the tranny so that it wouldn't clunk as easily. It's really hard to explain, and honestly, it's more feel than anything. I tried posting it once, and after reading my post, it didn't strike me as something someone would be able to get just be reading.
If you really want to save the bucks, spend the $20 Canadian to have the ATF analyzed. If it doesn't pass, get it done. In either case, I'm willing to bet the ATF in your car is the same ATF the car had when it left the factory. And if that's the case, I don't see any reason not to flush and fill your ATF.
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