Thanks everyone for the hearty feedback - a few replies to your queries:

First, allow me to defend my mechanic instead of assaulting him - I believe his exact words were, "the great thing about Volvos is that they take a lot of the crash impact internally, which keeps you safe, but results in a lot of damage that can be hard to detect until you take it apart and get inside."

As for airbags - they did not deploy, but we were hit hard enough to really appreciate the seat belts. I've never for a second doubted their worth, and I never drive or ride without one on, but its truly amazing how little speed it takes to really throw you.

This accident was clearly the other driver's fault and that insurance company will be picking up the repairs if I decide to go that route. My mechanic says he can do it for $2685 and it will be as good as new. That being said, this is an 11 year old car with about 150,000 miles on it. Now I know in Volvo years, it's still a pup, but there is frame damage and I'm worried that it won't ever be quite the same again. I'll be interested to see what the insurance folks decide the value of the car is - if I get offered enough to make it worth my while to shop for a slightly newer 850 with a clean history, then I'll be tempted to go for it.