Here is an old BB link with information I posted when doing a retro fit.
It was easier for my application to remove the cowl, which requires taking the wiper arms off. You just get more room to work and it's easier to do a thourgh clean-out of the air intake. Spraying lysol into the cabin air intake, with fan running, will help clear-up the musty smell. Give yourself enought time and lighting. Not a hard job.

http://www.brickboard.com/AWD/volvo/1377160/850/cabin_filter_1993_850.html

Your car doesn't have one. I believe they started in either 96 or 97. However, you can add one. I did exactly that to my 95 855. I bought mine from FCP Groton - fairly cheap.

It's an easy job. Similar to installing a new air filter. On the passenger side of your car below the windshield (think it's called the windshield cowl?) there is an open hole that leads to the evaporator. It attaches on the top of that open hole. To access the hole you will need to remove a plastic cover that covers the cowl. That's the hardest part of the job...:)

Chuck is right. The smell is probably coming from something else. How's your carpeting? Check underneath for water leaks.

if it's old enough, it may not have 1. the musty smell may not be the filter, either unless it's wet. here's a link to bosch's guide for all cars, scroll down to volvo-

http://www.boschautoparts.com/BAP_Technical_Resources/Filters/CabinAirFilterInstallation.pdf

good luck, chuck.

This link should help. What year 850 is yours? Early models didn't have a cabin filter, but it can be retro-fitted.

http://volvospeed.com/volvo_repairs_how_tos/filter_replacements/pollen_cabin_filter_replacement.html