The recall was probably for lights and/or turn signals, both of which had recalls.

In the meantime, you car's not dying....you just have ordinary brakes instead of ABS. If you were quoted $516, that's a pretty fair price as far as it goes. (I paid $450 to an independent Volvo-only repair center.) You should report the ABS failure to the people in charge of TSBs and safety recalls: http://www.nhtsa.dot.gov/cars/problems/ivoq/default.htm. Maybe if the NHTSA gets enough of these, they'll take notice and do something...or get Volvo to do something.