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I have a 2000 S70 with the "AW5(5 speed auto transmission). It is correct, you must use synthetic trans. oil- NOT DEXRON III or anything else. I even went by the owner's manual and used "Volvo Gearbox Oil" available only at your Volvo dealer- at around $70. for a 4 liter bottle, you will need two bottles to complete the job. If the dealer does this service for you, it will cost you around the price you mentioned. I don't "flush" my transmission, I do what is called a "drain and refill". With this method you don't stand the chance of stirring things up, you just freshen up the fluid.
Bob
'00 S70 (53K), '93 854GLT (170K)
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