I think I've had this conversation before....

I currently own both a '92 965 (106K) and a '97 V90 (91K). I like both cars for different reasons. I've had the V90 for only a few months, so I can't comment on it's reliability, but it is a much more refined ride than the 92. The IRS makes it a bit "softer" perhaps, but then I have just replaced all shocks on the '92 with nivomats, as well as installing IPD sway bars. I can't for the life of me understand why anyone would switch away from the nivos, other than $$$. They're wonderful self-leveling shocks, especially for a wagon. I'd give anything to convert my V90 to them, and will consider it when the time comes, which may be soon.

The 92 has always reminded me of the next logical step in the classic Volvo line. Nice amenities, but nothing too extravagant. Still you basic Volvo with notable exceptions, which is why it appealed to me in the first place. The 92 has has been reasonably reliable, save for the PNP switch which plagues all I6 900 series, as well as some of the FWD, apparently. The '97 has lots of updates, including the aforementioned timing belt interval increase.

By most of today standards they are larger cars with lots of room; very comfortable seats, and all the bells and whistles one really needs, IMO. Both have adequate power on the highway.

The 92 has much more punch, hands down, especially at the low end.
The 97 has better headlights, rear suspension, larger gas tank (by 5 gal.) and a few other bells and whistles that make life easier.

My son is buying the '92 from us, but if likes the V90, I'd be happy to keep the 965.

The porosity issue is a dead issue ( at least the cars are that suffered from it), but if you want to be sure, have the car's cooling system pressure checked on a cold engine. The timing belt issue is the achillies heel; change it on interval or somewhat sooner in the case of the V90, let's say 50K.
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John Shatzer, 97 V90 @ 90K; 92 965 @ 106e