Steve,

When using a thermostat with a temperature that low, the computer may never enter "closed-loop" mode. In "open-loop" mode (when the car is below 160°), the car will get worse gas mileage and, as you had stated, the engine will sustain increased wear. In open-loop mode, the computer runs the engine at defaults, not really recognizing some sensors (such as the oxygen sensor). Therefore, the oxygen sensor gives no signal to the computer and the computer cannot automatically adjust the fuel/air mixture. In short, I would recommend buying a 192° thermostat from Volvo and replacing it when you get a chance.