Most likely it is a sticking thermostat or a faulty cooling fan or relay. On a interesting note though, I have seen one 960 that sheered the water pump impeller smooth off. By far the most common problem is thermostat, relay, and fan though.

Do not drive the car until it is repaired though, on average the cost to replace the head is around 3,000. On the off chance it does need to be replaced get the volvo rebuilt head. It costs the same as a good machine shop rebuild, but if the dealer does it the labor is covered if anything goes wrong (same as a good independent shop I guess).

and that's my 2 cents