Well, some new information here.

Turns out the O2 sensor on this is screwed in underneath the exhaust manifold, not in the outlet pipe of the turbo. It also turns out there is, in fact, an O2 sensor present, but it had been unplugged - possibly by my mechanic during the replacement of the idle air motor. Need to ask him whether he was mucking about on that side of the engine when he had it there. I went ahead and plugged it back in and the idle has smoothed out.

That being said, it still does not appear the CIS system is functioning. I went ahead and unplugged that from the microswitch, dropped the base idle down as low as I could with the throttle stop screw, and plugged the idle motor back in - no effect on idle speed at all.

So I have downloaded the green book for the k-jet CIS system from k-jet.org
http://www.k-jet.org/files/greenbooks/200/Section%202%20-%20Engine/TP30363-2_cis_system_repairs.pdf

This provides detailed troubleshooting steps for the electrical function of the system, and procedures for proper idle adjustment. It also reveals the fact that Volvo changed all sorts of details around from model to model and year to year... so I'll need to go through all this and figure out what's going on.

You just don't get to have this kind of fun with a non-turbo.