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From what I could find, it sounds like the 2nd gen xc70 switched to an upgraded Haldex system in 2003.
http://volvoxc70info.blogspot.com/2009/11/haldex-and-earlier-vicous-coupling-awd.html
However, I found something else that may indicate the 2001-2002 models had a viscous coupling (I don't think the viscous coupling is as well regarded as a Haldex system). http://www.volvoxc.com/forums/showthread.php?7101-Early-Haldex-AWD-in-some-2001s
Anecdotally, my mom had a 2001 XC70 (2nd gen) my senior year of high school. It was a wonderful car, but definitely a problem child. I can confirm that its AWD system worked fine for Midwest winters and one may, if one were so inclined, perform spectacular four wheel drifts in snow covered parking lots. I don't know anything about that, though.
Others seem to think the early 2nd gens may be problematic as well, though these people are writing from South Africa/Namibia http://www.volvoxc.com/forums/showthread.php?13153-Opinions-on-buying-a-2001-volvo-xc70
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