The Volvo V50 version I have (1.6D) is underpowered, and a joke. I hate it. It's slow in acceleration, you need to slip the differential if you want it to start at a light in a decent fashion. It's slow in overtaking: I don't like overtaking in it, as I don't trust the engine. I think it feels like it could lose power at any time.
I think if it had a real engine, it would really be a nice car, but the 1.6D is just too small for this car.
I've had an 1994 Astra 1.7D, which is a whole lot slower, but it didn't pretend to be a sporty car, and it was a really comfortable ride. The Volvo's ride is too hard to be comfortable. Especially in combination with a 1.6D, the ride is just too hard. It's not like you need a sporty suspension with its total lack of power.
I mean, a 29000€ car that can't even get to 60MPH or 1000 KM/U in less than 10 seconds? I wish I had gone for the Volkswagen Golf V Variant. It has 5 HP less (or has it?), but is faster - tried it, a colleague of mine made the right choice and chose the new Golf instead of the V50, and I really can't keep up with him (and you should know that he couldn't keep up with my old Golf IV Variant in his Golf V Variant).
Also, the V50's stereo, compared to the Blaupunkt stereo from my old Golf, is a complete disaster. It sounds like an 80's tape recorder. It's so bad I almost don't use it at all. Also, the Blaupunkt ate MP3-cds, and the Volvo's sound-system doesn't, which -for me- is reason enough to hate it (hello to Volvo; the year is 2008, people actually use and want MP3 - as standard and not as a gazillion € option) The stereo in the Golf V is also a lot better than what Volvo saddles you up with.
The car does handle better at speed than the Golf, but then again, it was really much easier -and more fun- to attain some speed in the Golf. In the Volvo, you have to rev and rev and rev it, and still it lacks power.
The Volvo V50 I'm driving now costs about 29000€ in Belgium. For that money you should be able to buy a really nice car. Sorry, but the Volvo V50 just isn't worth it's money. When comparing it to equally priced cars, it really sucks (pardon my language, but I really don't have another term for it).
If I could choose another car right now, I think I'd go for the Mitsubishi Lancer DI-D. It has the same look as the Volvo (front), and it handles at least as nice, it is cheaper, and the engine isn't a disaster: it really gets around quite nicely. Also, the lancer's stereo eats MP3s and it sounds REALLY nice.
To Volvo: fix your act, or drop at least 30% of the current price of the V50 1.6D. It just isn't worth it's money.
Also, compared to a Golf IV Variant, the V50 is a lot smaller. You just don't get the same loading volume. The hatch is smaller, the trunk's opening is smaller, the trunk itself is smaller and lower. With the seats put down, it makes up a little, but the V50 isn't as useful to load a lot of IKEA stuff as the Golf IV Variant is. Also, the glove compartment in the Volvo is hardly big enough to contain a pair of gloves.
So, all in all, if you have 29000€ to spend, spend it on a Golf or an Octavia. The Volvo just isn't value for money.