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On "early" 850s, the 205/55/16s may rub. I think there was change in the wheelwell design somewhere around 1995-1996.
http://www.volvospeed.com/Repair/2055516.htm
So do look. If there's no rubbing you should be free and clear.
I have 205/55/16 Dunlop SP5000s, my second set. They are speed-rated and also M&S rated, which is unusual.
By '98 the 205/50/16s were an no-cost option. My dealer REFUSED to order them for me. There "may" be a slight theoretical performance advantage, but it's outweighed by the hassle-factor of the lower profile tires being more prone to failed sidewalls and bent rims.
-bill d cat
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