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Even with the "T5" high-pressure turbo engine you might notice a difference, since the S60 is significantly heavier than the 850.
The Volvo US warranty is "bumper to bumper" for the first 4 years/50,000 miles. You can also purchase an additional extended warranty coverage, the "Volvo VIP" warranty, for up to 100k miles. Certain deductibles and exclusions may apply on this latter warranty. See your Volvo dealer for details.
I've heard rumors of HID headlights for '04, but they've been promised for the last 2 years.
-Punxsutawney Phil
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