Since you've got a turbo, you'll have an AW-71 transmission in your vehicle (the tag on the side of the tranny under the driver's door will read 03-71), and it's perfectly fine to switch to synthetic fluid (many of us do so). With a synthetic ATF like Mobil 1 in your tranny, you'll reduce your operating temps and the wear and tear by a significant amount. A 20 degree reduction in temperature inside an auto-trans will effectively double the life of the clutch packs (and the opposite is true, 20 degrees higher cuts it in half).

Regarding servicing the unit, the AW-70 and AW-71 transmissions in our vehicles do not have a typical "filter" as commonly equipped on many American made vehicles. There is a fine mesh strainer that filters out any significant particles from being sucked up into the pump. Basic procedures:
1. Using the drain bolt in the bottom of the pan, drain the ATF fluid from the pan.
2. Unbolt the tranny dipstick tube from the side of the pan. Use lots of P-Blaster on it and give it several soaks before attempting to wrench it free.
3. Unbolt and remove the tranny pan.
4. Visually inspect the filter with a flashlight. If you have a new filter and two filter gaskets, feel free to change it out. BE ADVISED: Most filter kits for these vehicles only come with ONE filter gasket and you REQUIRE TWO for this application. There is a spacer block between the valve body housing and the filter (starting in 1983 and later vehicles) so as to lower the intake for the ATF fluid. If your kit only has one gasket, you can still change the filter if you are very careful in removing the old one and can save one of the old gaskets (which can be difficult to do), -or just buy a 2nd gasket at your local Volvo dealer or auto parts store that can order them individually.
5. Clean the transmission pan and the magnets. This is where all the old clutch material, sediment, and metalic particals collect and this step is more important than changing the filter. This is the reason why you removed the pan, to clean the sediment out. I'd also advise using additional (multiple) or larger magnets in the tranny pan for improved partical collection. The large ring donut magnet from a General Motors T-125 automatic transmission is well suited for this job (about 5 or 10 times more surface area).
6. Re-attach the pan to the tranny. When bolting it back on, I'd advise putting a dab of RTV on the threads of each of the 10mm bolts. This keeps them from backing out due to the vibration and heat that the transmission experiences during normal operation. If I'm installing a rubber pan gasket, I install it dry. If it's a cork gasket, I smear it with a light coating of RTV until absolutely no cork is visible (360x360 degrees), even on the edges. If it's a crushed fiber or crushed felt gasket, I tend to do the same as with cork. -just to be sure that it's not going to leak in 6 months. The spec'd torque values for the transmission pan is somewhere around 5 ft-lbs, but I tend to progressively tighten to about 10 or 12 ft-lbs.
7. Apply anti-seize to the threads of the dip-stick nut and reattach the tube to the pan.
8. Fill with your favorite transmission fluid (synthetic is prefered for longevity). There's a cheater notch on the dip stick, cut in the side of the stick several inches above the full/add marks. Remember, the fluid is intended to be checked with the engine running, and when it's off some of it drains from the torque converter into the pan. This notch is there to approximate where the fluid level should be when the engine is off.
9. If you're planning to "flush" the rest of the fluid from the automatic transmission. Disconnect one of the transmission cooler line junctions at or near where it attaches to the radiator, and hose clamp a piece of clear tubing to the fitting. Off the top of my head, I don't remember which direction the fluid flow is, but you'll want the fluid flowing out of the transmission through the clear tube and into a bucket.
10. Have an assistant start the car and let it idle until about 2 quarts of fluid come out of the tranny cooler and into the bucket. Stop the car, refill the transmission, and repeat a few times. The ATF fluid capacity of the system is roughly 8 quarts, but you'll never get every last little bit out. The torque converter holds 3 to 4 quarts, but it can't be drained completely due to it's toridal shape. If you flush 8 quarts of ATF through the system, you'll probably have gotten about 75% to 80% of the fluid changed.]
11. Reattach the tranny cooler lines, drive the car for a bit, let the fluid warm up, and do a final level check.

Also, while you've got the transmission work going on, this is a great time to flush the power steering fluid. The system capacity is roughly 1 quart, and flushing 2 to 3 quarts through it will get most of the old fluid out. The fluid is ATF Type-F (commonly used in automatic transmissions in import vehicles and older Fords), and is not to be confused with normal "Power Steering Fluid." Basic steering flushing procedures:
1. With the wheels off the ground (and the fluid warmed up from driving), disconnect the upper hose where it attaches to the power steering pump reservoir and direct it to a bucket.
2. Drain the fluid from the resivouir by loosening and then re-tightening the lower reservoir hose.
3. Have an assistant start the engine and turn the wheels from stop to stop (left and right) a few times, while you add fresh fluid to the reservoir. After 2 or 3 quarts, you'll have flushed most of the fluid in the system.
4. Stop the car, reconnect the hoses, fill the reservoir, drive, and check again.

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God bless,
Fitz Fitzgerald.
--
'87 Blue 240 Wagon, 251k miles.