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95-97 850 or 98 V70 are your best bets for simpilicity and reliability. If you can afford it the 2003 and up V70's are also good.
I bought my 95 850 wagon two years for what you are willing to spend. A little pricey, but it was well maintained and in pristine condition. So far, it has been a better car than my 90 240 was. Best high mileage used car I've ever bought. Only expensive repair has been a radiator.
BTW - My car regularly gets 29-30 mpg on the highway (automatic). The 5 speeds can break 30 mpg. In town mileage is low 20's.
The turbos are a lot of fun but more maintenance. If you buy one make sure it has been well cared for. Consider the 97 850 GLT or 98 V70 GLT. Light pressure turbo and all the comfort goodies...:)
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