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My experience with brake pads on the 850 has been that the higher performance pads don't really cost that much more, and by going with an uprated pad you can a) decrease the amount of squeal, b) get a nice bump in braking performance, and c) cut down on the amount of dust generated. My car had the factory pads in it when I purchased it, and the amount of dust being thrown onto the wheels was incredible. Fortunately, they needed to be replaced soon after I bought the car. I went with the PBR/Axxis metal master pads on factory rotors. With good shims and the liberal use of anti squeal compound I've had no problems, and the dust generation has been cut down dramatically. Braking performance is at least equal to the factory pads. My next upgrade will be to Brembo or Zimmerman rotors, and the PBR/Axxis ultimate kevlar/ceramic pads. I've got those pads and drilled/slotted Brembo rotors on my Triumph TR6 and it's a great setup. My buddy has been using Hawk pads for a long time now and loves them, and he puts his car on the track quite a bit, so I believe him when he says they work. I've also heard EBC green stuff pads are very good as well.
As far as the rotors being cut, they make them so close to the minimum spec thickness these days that it's almost like you can't cut them. From what I've read here and elsewhere it's pretty much agreed that Volvo intended these rotors to be consumable items. Given the relatively low cost of OEM replacement type rotors I can believe that, and the higher performance ones aren't that much more.
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