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I live in NYC and have similar feelings. It does take potholes harshly. When I drive through all those stripped pavements, endless repair zones, I feel every bump. I think this is normal for the 850.
A few things improved the ride on my 850: good tires (I use Michelin MXV4+, but there are other good and cheaper tires), new sway bar links helped a lot.
Also, at 90K the ball joints were absolutely shot. Check yours when the car is on the lift, you do not feel this problem while driving.
A sales pitch - I still have a pair of brand new genuine Volvo control arms with ball joints for sale.
Yuri
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