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I went from an '89 240 to a '96 850T to a '04 S60R. I've heard numerous times that 2001 is the year to AVOID for the S60 as this was the year it was introduced and had some bugs that were worked out in later years:
2001-2: Clutch - On Turbo models, the clutch pedal may vibrate due to the hydraulic fluid transmitting pressures. A new hydraulic line with a loop that absorbs the shocks is available.
2001: Oil leak - Oil may leak from the differential vent. There is a replacement vent valve available.
NHTSA Recall History
2001: Under certain operating conditions, some cooling fans may overheat, potentially causing heat damage and rare possibility of engine-compartment fire.
2001-03 S60: On certain passenger cars, the second ISOFIX guide was not installed and, in certain cases, the owner's manual ISOFIX information is incorrect.
As KlausC mentioned, rear legroom is cramped in the S60 compared to the 850. In fact, the entire cabin design feels a bit more cramped but front seats are comfortable - sitting in driver seat feels like you're in a cockpit.
At only 40K miles, I get an ocassional groans from what sounds like the power steering pump. The trip odometer keeps resetting itself (fixed under warranty, software patch). And gas mileage is average at 27 hwy and 21 city (but i tend to have a heavy foot and she's AWD).
Overall, the S60R has required the most attention of the Volvos I've owned but has been the most fun to drive.
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