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I had a '98 S90 that had the same problem. Remote needs reprogrammed to sync up with the car's security system. Check the message board for accuracy on this, but from what I remember here's how to reprogram the remotes.
From inside the car with doors closed and locked, put key in the ignition position I. Switch between Position I/Position II four times(or maybe it's five-can't remember). The dash security LED will begin blinking. At this point, push the 'unlock' button on the remote once (or once on EACH of up to three remotes, if you have more than one - multiple remotes have to be programmed at the same time or only the ones you reprogram will work - if you push the button on one remote 3x, it will fill all three code ID slots and remaining remotes will not be accepted and you'll have to start over). The dash will respond with a beep. Remove the key and exit the vehicle - remote(s)should work.
My S90 got crunched by a big Dodge Truck, but I still have the remote. Been meaning to sell it on eBay, but haven't gotten around to it. Seen them go on eBay for north of $75 and new at the dealer they're $110-120. I'd sell it to a fellow Brickboarder for $50, if anyone is interested.
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'00 S80, '98 S90, '78 264GL (R.I.P.)
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