Just did this one on our 850. As Klaus says, the air pump is under the battery tray. It is connected to a round valve (SAS valve) up on the engine near the firewall by a hose. Due to a design flaw (Volvo engineers are good but apparently didn't realize water runs downhill) condensation in this line runs down and eventually fills the pump with water shorting it out. Mine must have had a pint in it. You can drill a small 1/8" hole in the bottom of the pump to drain it but it's probably shot. To check it, just unplug it from its relay (usually right beside it) and apply 12v to the blue wire. If the pump runs, your problem is elsewhere. May be the SAS valve, relay or the small selonoid located on the inside of the radiator shroud (has a purple and white vacuum line running to it plus an electrical connector. Replacing any of the components is fairly easy, well within the av erage DIYer.

New pumps are expensive (~$300. at Groton, probably $450.ish at dealer. I lucked out an found a new one on ebay for $150. but that was pure luck. I've seen several used ones there since.