Yeah, sorry the picture isn't more explainatory. All of the extra garbage hanging off of the bottom and right is the automatic tranny P/N switch.

Basically, you have a hot wire from the battery (mine is black). 10-12 gauge is fine. Then you have a wire from the solenoid to the starter. (mine is purple) Again 10-12 gauge is good. There is a wire going to ground. This should be at least as big as your hot wire. Finally, there is a wire coming from your ignition switch to the solenoid to activate it ("S" terminal). This is the wire from your volvo ignition that USED to go directly to your Volvo starter.

The Volvo igintion uses 16-18 gauge wiring. This is fine for the small starters in Volvos. Larger starters (like in V8s) will be drawing more current through the ignition switch and its 18 gauge wire. To avoid a melting incident, the starter solenoid is just triggered by the volvo 18 gauge ignition wire. By using 10-12 gauge wires between hot & the solenoid and the solenoid and the starter, you mimize voltage drop problems and maximize safety.

hope you get it hooked up OK!
-simon