Hmmm, it would seem that the speedo is OK if it shows the correct speed but the odo is no longer clicking over. The odo in this unit is probably electric, integrating time and speed, so I think that you're in for a panel repair. Mind you, I've never disassembled one since all my Volvo panel units have performed flawlessly since birth. The FAQ has a couple of good speedo shops (one in Texas) who rebuild these units inexpensively. It's far better to have someone rebuild them than try to figure them out on your own: the Volvo wiring diagram is of no help on this.

On the other hand, if the speedo is not showing velocity unless you are above a certain speed, then take a look at the sending unit and the wiring connections at the rear axle.