I agree with Blue Horse, you may wish to consider finding one in better shape if you're not willing to do the work yourself. If you are dedicated to fixing this one, let me do my best to get you started.

1. First, I need to strongly caution you against reving the engine while in Park or Neutral. The particular transmission that you have on your car is the ZF22 and there is an issue where this particular transmission would not relieve all of the pressure from the forward clutch disks once you shifted it into Park or Neutral. It's not worth going out and spending $1,000 to fix the problem with a rebuild kit, but you will want to avoid reving the engine when the car isn't moving. Note: If the car has been sitting for some time without driving (a few hours), it is safe to start the engine and rev it, should you need to do this for some diagnostic purpose. However, once you engage either Reverse or Drive, damage can occur if you rev it while in Park or Neutral. If the ZF22 transmission does end up dying, you can replace it with a more durable AW-70 that most of us have on our vehicles. The instructions are listed in the Brickboard 700/900 FAQ in this article: http://www.brickboard.com/FAQ/700-900/TransmissionAutoConversionZF-AW.htm

2. Regarding the brakes, the "Brake Failure" light in the instrument cluster does not represent the condition of the brake pads, it only signals a difference in pressure from the two different brake circuits. The most likely cause of this issue is air in the brake lines and this can only be removed by a good bleeding or flushing of the brake lines. (either vacuum bleed or use a power bleeder like the Motive one for $50) This should help remove or reduce a squishy pedal problem. If the pedal is still squishy or sinks to the floor after flushing the brakes, you probably have an isssue with some soft/failing flexible brake hoses (there are 6 of them, two for each front wheel and one for each rear wheel), or a Master Cylinder that has failing seals. More info on Brakes is listed in the 700/900 FAQ Brake Section.

3. Regarding the front wheel bearings, there are two different sets you could have. The original factory bearings were mounted into the hub (an inner and outer bearing for each hub) and the hub was an integral part of the rotor (expensive replacement). Most of these were upgraded at the Volvo dealerships over the years to a combination "sealed bearing hub" and seperate rotor. If you have the sealed bearings, you can replace the hub/bearings or the rotor independently. Depending on where you go to have this work done, the parts and labor could cost more than what you paid for the car. Budget $100 new for each sealed bearing and $50-$60 for each rotor, not including the labor. I don't even have a clue how much the integral hub/rotor units cost.

4. Exhaust repair. A Starla/Walker replacement kit is available pretty cheaply from FCP Groton. Assuming the catalytic converter is ok, you can replace everything after it for $150 using the 271366 kit from FCP Groton. If you need some individual pieces, the listing for your car is at http://www.fcpgroton.com/Volvo700900exhaust/VolvoB230F85_87.htm. Shop around if you desire, eEuroparts.com and vlvworld.com are two other good sources.

5. The sunroof can be a pain to repair, depending on how much damage there is. Many people seal them shut if they don't have the time or money or spare parts (from a salvage yard) to do the work. There's a section devoted to this in the Brickboard FAQ.

"On two occasions, when stopped, she started revving the engine to where I couldn't even hold the break down to keep her from moving. Then the car died. It was really scary. Any ideas on what this could be??"

Without seeing the car in person and spending some time under the hood, my best guess would be a vacuum leak combined with a wiring fault or air mass meter problem. -or a sticky throttle body that needs to be cleaned (badly).

"When I put it in drive, there is a very rough start at first. Then it smoothes out."

My best guess is a vacuum leak from either a split or missing vacuum hose or a cracked accordian tube. If I were in your shoes, I would also start working through the factory service schedule and take care of any items listed in the tuneup and routine maintenance section. You should plan to replace just about every fluid and filter on the car since the previous owner has most likely neglected them. You may also need to change out the spark plugs (and plug wires if necessary), and remove and clean any carbon deposits off the distributor cap and rotor (which can also lead to starting problems on cold damp days).

FYI, if you end up shopping for another 700 series Volvo in better condition, my vote for the most reliable one with the lowest maintenance cost would be a 1988 non-turbo 740 or 240 and here are my reasons why.
1. The 1980-1987 cars have biodegradeable wiring harnesses that can be very problematic, time consuming to troubleshoot, and will eventually need replacement unless you live in a very cold climate (degrades faster with heat). 1988 and later cars do not have this problem.
2. The 1985-1988 non-turbo cars have LH-2.2 fuel injection systems with bulletproof fuel injection computers and I have yet to see one fail. The 1989 and later LH-2.4 cars are VERY prone to computer failures and my friends who have them have replaced the ECUs (computers) at least once if not twice on their cars. The Rex/Regina cars seem to be pretty reliable too and come with a robust computer and do not have an Air Mass Meter.
3. Avoid turbochargers. A turbo car will cost you at least double the maintenance needs due to the increased wear and tear, heat fatigue on the nylon/plastic/rubber parts, and the upkeep of a few extra expensive components (like the turbo and hoses, and replacing them will probably cost you more than what you paid for the car).
4. If I recall correctly, the ZF22 transmission was used on the 740 GLE cars from 1985 through 1986 wagons and 1985 through 1987 sedans. The rest of the 740 cars with automatic transmissions received the more durable Aisin Warner AW-70 family of transmissions.

God bless,
Fitz Fitzgerald.
--
'87 Blue 240 Wagon, 280k miles.
'88 Black 780, PRV-6, 149k miles.