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Congrats! You've got one of the best engines Volvo ever produced! My first step with any used car is to replace all the "consumables": all the fluids, check all the seals, PCV system, tune up, timing belt... check out the 700/900 FAQ on this site.
More Power?: If everything else is in working order, (oil leaks, wiring etc...), get a calibrated (numbers instead of "yellow")boost guage then check out www.dawesdevices.com. $30 and 10 minutes later, you've got more boost. (10-12 psi is a good place to start.) then check out www.mvpvolvo.com or someone similar for an exhaust upgrade.
Better Handling?: Once you're satisfied that all the bushing/balljoint/tierods are in good order, visit www.ipdusa.com for swaybars and/or springs... (get the sways first, and decide for yourself if that's enough....)
You should be able to "take" a BMW 325i... :)
What is your car?
Your engine is refered to as a B230FT, and you have the latest/greatest iteration of it.
Your turbo is most likely a Mitsubishi TDO4H-13C.
Transmission should be an AW71 automatic 3spd+OD.
you probably have the thickest brake disks Volvo offered on the 700/900 series, so they're less prone ot warpage.
Have fun! You've got a great car! check out www.turbobricks.org for more help of "hotrodding" your brick...
-PAul Demeo
1990 780T
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