Mi Amigo,
I surely think a LSD would be a great benefit to a Volvo, even more so if you modify the motor. The benefits of added traction help, from hooking up to hard cornering, in every aspect of performance. I say, with the cam and other mods, a N/A (b230) motor is easily capable of making 175hp with basic head, intake manifold, air box, cam, & exhaust modifications. Of course, larger injectors might be necessary but those are cheap and attainable (Ford browntops in our case).
The transmission is also a factor, with a manual set up being optimum. An auto trans would need a higher stall converter to really maximize any extra cam realated power on the street... I still need to do a little research on the converter... but I have heard they are out there (if any one can help me here)!
In an aside, the VX cam in my ride has helped tremendously, worth every dime in my opinion. Sterndogg runs the V15 (Enem). Turbobricks.com is a great way to get down with a Volvo's potential.
Finally, the set up of a Volvo rear w/ LSD is very easy and the parts are also readily available as it is a Dana unit... and gear ratio, combined with your set up, can make for a quick steet ride.
Peace, Jon
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