Fairly quickly your car should heat up to the middle of the temperature gauge.

If the gauge reads any noticable distance above the middle, or in the "no heat" case, below the middle, your problem is probably the thermostat.

If the temperature gauge goes to the middle, you should have plenty of heat.

My wife complained about the heat in her '95 wagon. I found that she had not set the controls properly for heat. I smacked her knuckles with a ruler and made her read the owner's manual!

In her opionion, the top center vents must be open to get the best heat.

Does your car have a pollen filter? Perhaps it is clogged.

Do not take anything for granted. My '90 740 Turbo had poor heat. When the thermostat was removed, it was found that someone had pulled the center section into a position that allowed then to twist it to one side making it stay open all the time! I did figure out why they did this - the electric fan was siezed up tight. They probably doctored the thermostat to maximize cooling. Later I found that they had repaired an important turbo hose with tape, and fiddled with one of the fuel controls.
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2 8s & 2 7s 600,000 miles total

It's the thermostat - bet the farm on it. You are lucky if you get one that lasts over 100k miles.

Here is a link to a great web site's instructions on thermostat replacement:

http://www.volvospeed.com/Repair/thermect.htm

Although if you don't mind a little spilage you don't need to drain the fluid.

Don't worry. Volvos have some the best heaters I've experienced in any car. All you probably need to do is replace the coolant thermostat. You can get one for under $10 and it's pretty easy to replace as long as you have the proper sized torx bit.