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The only problem related to quality problems was the radiator fan on my 2000 S80 T6. Everything else was either the dealer's fault or the previous owner's fault.
I'd go for a 2000 model though. I've heard of electrical and transmission problems in the 99's that the 00's don't seem to have. I picked up mine for $25,000 last May, certified with warranty until 100K or March 2006. It had 44K on it when I got it.
I wouldn't worry too much. I've never driven a car I liked better. BMW's have better handling, smoother engines and transmissions, but my Volvo is the nicest car overall I've ever known. It's a blast to drive, extremely comfortable, has 'luxury' without being 'old man-ish" plenty of power and great handling. Decent transmission, as well.
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