Chances are high that it's the upper spring seat on the struts. This part is also known as the upper strut mount bushing. I have had to replace them on both sides of my 2001 S80. The right at 75K miles, and the left at 120K. These parts are notorious for going bad on the S80's.
To tell if yours are shot, remove the black plastic cap on top of the strut in the engine compartment. Use a small screwdriver to remove the cap. Then with a socket or wrench (21mm I believe, you can also use a standard size socket or wrench that fits), gently turn the nut back and forth with LIGHT TO MODERATE force. It should not spin around, but should feel "spongy". A spongy feel means the bushing is still OK.
If it spins around in either direction then the spring seat is shot and must be replaced. What happens is the metal collar that is molded into the rubber bushing separates from the rubber part. Fortunately the spring seats are not too expensive, I paid about $15 from FPC Groton.
If the spring seat seems intact (nut does not spin around), then squirt some oil in between the two black round parts directly under the large nut. This will silence the noise. They sometimes make noise in cold weather climates (like here in NJ) even if they are not bad.
I included a picture of the part.
http://www.fcpgroton.com/product-exec/product_id/6619/nm/Volvo_S80_Spring_Seat_Aftermarket_99_04_/category_id/185
Good luck.
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2001 S80 2.9 (non-turbo), 115K miles
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