hi,
the awd system is not just and on or off arrangment, the xc90 uses a haldex variable torque splitting centre diff which basically means that normally i.e. in perfect traction conditions the car only drives power through the front wheels, when there is a speed difference between the front and rear wheels i.e traction loss,then power is feed to the rear wheels depending on how much wheel speed difference there is. but only up to certain amount for instance the back wheels will never get more power than the front etc..
what some people dont realise is that neither the front or rear diffs is a lsd so in certain situations if the left front wheel was to never get ANY traction at all then the vehicle could get "stuck" and not be able to move at all even though its awd!
hope this explains it a bit.

steve.