If the radiator does need replacing, it is a several hour DIY job. Scroll down the page and learn:
http://www.fcpeuro.com/products/volvo-radiator-s60-s80-v70-xc70-1
Yes, this is for an 850 Turbo, but really close to your car. Ask the mechanic if the radiator and Volvo coolant is included in his estimate. $800 is OK if they are, an OE radiator is over $300 and Volvo coolant is not cheap either.
If you DIY, caution!! do not overtighten the hose clamps, you could crack the plastic. Hose clamps are tight enough when you can no longer twist the hose.
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My back feels better when I sit in a Volvo seat
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