Jeff,
some of the problems found w/ the AWDs in 1998 (and very few 1999s and 2000s) were that the shafts (in the AWD system) were out of balance or "not straight" by a few thousandths of an inch, resutling in a vibration felt at certain speeds. That can be covered under warranty and/or a GOOD technician can cure it by installing microweights in certain areas.
Anyway, the "R" is a unique automobile, I just sold my 1998. I had it for almost a year and NEVER had a problem w/it other than two lightbulbs burning out within 7 days of each other and (just recently) my air pump went (replaced under warranty). I sold it because I had the opportunity to buy to buy someone else's 2000 "R" for no extra cost to me. Unfortunately, that did not materialize so I just ordered a 2001 V70 T5 w/ a MANUAL transmission; it will be here first week of March.
Any model year is very good; personally, I do not care for the Saffron Metallic; I think it looks great in the C70 and I have also seen it look great (in Europe) in the S70 R AWD! In the wagon, I think that it looks attrocious and, trust me, it may affect your resale value should you want to get rid of it. Same goes for Emerald Green Metallic. The "HOT" colors for this car are Black, Silver Metallic, Venetian Red Metallic and White.
You also want to find one w/ the Dolby Surround Sound system...amazing sound system!
As far as warranty is concerned, you can take the car (depends on the mileage) to an Authorized Volvo Retailer and have it certified as "select Pre-Owned" for about $500 which gives you nice warranty up to 74,000 miles.
Or, if the car has not completed 36 months of life or 36,000 miles on the odometer, you can purchase a VIP Extended Warranty but that will cost you a lot more.
Good luck!
Yannis
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