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Electrical issues plague ALL Volvos - mine does annoying things all the time. Saabs too, on the rare occasion when my interior lights would work when I'd open the door, it was like God himself was lighting the way. Not to mention having the thwack the dash to get the left speaker to work.
S40's are one of the most reliable Volvos from surveys done. I've seen one that rated the 1st gen S40 (I believe it was European), and it was rated the 5th most reliable car. The 2nd gen also rates very high.
You will find complainers everywhere, even people saying their Honda Civics and Toyota Corollas are unreliable pieces of junk (the 2 most reliable cars in the WORLD), but you never hear anything from the people that have had good experiences.
I like the S40 honestly, its very fun to drive, but it was too small for me.
One of my friends had one, and was sandwiched (run into) at 40 mph between a Grand Cherokee and an Escalade on I-81, pushed under the Jeep, and the rear of his car demolished. He walked away with only a bruise from the seatbelt. THAT is why people buy Volvos.
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