Well, I replaced it and I wanted to update the board on how it went and give a few pointers to people who are doing it themselves. It did take me two hours to do it but I was totally clueless going in so it should have taken the Volvo guys about 30 minutes at the dealership. The hard part was finding where the plug was and getting that disconnected. Here is what I did:

Unplug the battery
Jack the car up and remove the driver side tire (it's easier to see/access the plug with it off)
Unscrew the sensor from the pipe
Unplug the sensor (tricky part because it's pretty tight in there)
Screw the sensor in and then plug it in
Connect the battery back and the computer should have been reset

I got the OEM part and I would recommend getting that as well. It would have been a pain to solder it in and I hear that it's a better quality part than the universal anyway.

Dave,
I had the displeasure of replacing the O2 sensors on my car recently,(I'm still chasing the problem we were talking about), and it was a pain in the #$@^!!. My car is AWD, so there's not as much room. Probably on your car it is a lot easier to get at the sensor. The trouble I had was getting at the connectors and actually disconnecting them. They had some really good interlocks on them, and were in a really tight location in between the transaxle and the firewall. I'm not trying to discourage you, but I'd be prepared to spend the full 2 hours if everything doesn't go just right.

Good luck,

Mark

Most shops will charge a 1 hour diagnostic labor fee for a CEL so that's 1/2 of your estimate as a tech should diagnose a code, not just read a code and ASSUME that it's a bad part everytime.

With some of the newer cars, like early S80s for example, changing an O2 sensor isn't as easy as you'ld think. I'm not sure if I've replaced one on an S60 yet but 1 hour to replace one (just replacing that part) isn't an unusual flat rate time for that job. The code may or may not dissappear w/o Vadis re-setting it. If it does reset, it could take a few days.