FWIW You might want to hold on for another year if you're really stuck on a Volvo.
(what follows is purely personal opinion and speculation)
Their proposed saled to Geely notwithstanding, they are in the middle of a pretty important shakeup of their model lines which really all started with the introduction of the C30, but which really took hold with the XC60 intro.
While the S80 is almost certainly going to stick around (though it is due for some minor changes), and the XC70 has a high percentage (say, 95%) of basically staying the same for the next couple of years, and the XC60 was just introduced, the rest of the lineup is due for some changes.
The new (MY2010 in NA) XC60 has been received well (excepting the NAV system) and this success, coupled with the successful intro of the C30 in 2007/8 and the re-launches of the S80 and V70/XC70 has really put the wind in Volvo's sails in terms of their confidence with bringing new ideas to market. They're being surprisingly aggressive with their model lineup right now. Almost uncharacteristically. (I remember the days when you could buy a 240 sedan or wagon and that was pretty much it).
The new S60 replaces a model that was essentially 10 years old. It's amazing the thing was still selling at all really. (BTW, GM pulled the same trick over at Saab with the 9-5 and it damned near killed the company...) The new S60 shows a new direction in terms of styling and technology, but also in the approach to that segment. It's a coupe with a second set of doors scribed in.
They're currently testing a brand new V60 (http://www.autoblog.com/2010/02/16/spy-shots-volvo-v60-spotted-doing-the-cold-weather-thing/, and I can only assume it's intended to replace one or both of the V50 and V70 line. (Note, I said earlier that the XC70 is likely to live on, and I think this is still true regardless of what they decide to do with the V70 line/name) (Also, I don't really think the V70 is going anywhere as it's really a V80 now that it shares the S80 platform).
The C30 is due for a revamp soon, but I think the changes will be relatively minor. I think they feel they've got the strategy basically right on this one, so I don't think there are many changes coming there - I'd like to see an AWD model, and I'd like to see a really cheap bare bones model for less money than a Mazda3... just wishful thinking really.
The C70 is getting an update next year (?) and the changes are more or less along the lines of what I'm predicting for the C30 - bringing the styling up to date and improving the interior, etc, but basically it's the same car and same strategy.
If you're looking for a wagon and not looking to spend as much money as a V70 or XC70 will cost, the new V60 might fit the bill well, but we/you won't know until it's released will we?
Also the XC60 might be your ideal ride - it's got some of the features of a wagon and some of the features of a sedan combined into a high-ground-clearance mini-SUV package. It's quite attractive really.
And if the XC60 floats your boat at all, you should have a look at the Ford Edge and Mazda CX-7 as well, which seem to be similar platforms.
As KlausC has said many times on here before though - don't be sold on Volvo too strongly. There are many good offerings from other companies. Subaru's wagons are esp interesting to me given the price and features and build-quality/reliabilty numbers and rep they have. I'm not crazy about their styling, but I might be able to get over that if the functionality was there. Also their gas mileage is pretty great compared to similar sized Volvos, which I think is mostly owing to the weight discrepancy (and I can only assume this is due to less soundproofing and less safety gear? Anyone know any different?)
BMW's 5-series touring wagon is also very attractive, though I can't imagine paying the prices they want. I think Mercedes has a wagon as well but I'm not sure if the current model is available in NA.
Also consider that last year of the previous version of the XC70 (2007?) is likely a great bargain right now, and there should be lots of them coming back in off leases.
If funtionality is your primary concern, you might consider the Mazda5 as well. I really dislike the styling of this one as well, but those sliding rear doors and mini-mini-van setup give this one a real advantage functionality-speaking.
One last thing I would consider - you've likely got a lot of driving left in the 1999 if you don't mind doing the maintenance. I can't say whether it will be less than a new car payment or not, but I know you can push that car past 250k without much problem if you want to. The new car itch is hard to scratch though isn't it?
--
1998 V70 AWD->FWD Turbo 200k+
|