Because it's a turbo, there is tremendous tuning potential for this engine. The stock engine is relatively conservatively mapped. A simple ECU flash upgrade from IPD or BSR should bring it up to 330-335 hp, with improved throttle response. If you add an aftermarket downpipe and exhaust, the output starts to approach 350 hp. To get much more than 350 hp requires an upgraded turbocharger. Get much past 400 hp, and you should start to consider upgraded rods.
Still, getting to 350 hp typically costs only a few thousand dollars, and will put you ahead of an M3 on most roads (and much more comfortable while doing it). The latter comes pretty much tuned out and squeezing significantly more out of one costs a fortune. Drawing 350 hp out of 2.5 litres is fairly remarkable. At that power strata, most of the competition is running heavier, thirstier, larger displacement V-8s.
I would not recommend tuning out an R until the engine has proved out and broken in in stock form, normally in 3-5k miles.
The R has absolutely zero torque steer from my experience. It is a very neutral launch. The only think most enthusiasts would like to see would be a higher RWD bias on launch. Because the drivetrain is so "sticky" in preventing wheelslip, don't expect tire burning launches and a little early bog. But the car more than makes up for it after the first two shifts.
This car has a very high tech computer-controlled drivetrain and chassis, with sensors just about everywhere reading every variable, and constantly adjusting each shock and the power delivery at each wheel about 500x per second. So, power can be anywhere, depending on conditions. It's a decided step up from the quattro system in my experience. However, this extensive computer assistance can be annoying and detract from ultimate performance to a trained, skilled driver. But it usually makes the average driver better, and can get the unsavvy out of trouble at times.
Putting in shorter, stiffer springs will transform the R into a bona fide track car. The stock springs are on the softer side, which allows for good road comfort. The active suspension settings are not a gimmick, and do tighten up the chassis considerably in advanced mode.
Ditching the OEM tires with a premium aftermarket set makes a world of difference and ratchets up handling prowess and feel a significant notch. Michelin Pilot Sports are a favorite upgrade tire.
The R's seats are the best in any Volvo, and Volvo still has the best seats in the business. So sitting in an R is about as good as it gets. I'll take the R's inside ambience over a 3 series or A4 any day. Consider the Atacama leather option, which is truly special.
I would disregard a certain sports sedan "test" a US mag did some time ago as regards the R. The test was conducted in 100+ degree heat, and with a decided bias towards one car in particular (which won even though it broke down during the competition). Turbos are notoriously bad performers in higher temps. In good temps (below 60F), this car is a rocket sled once 3rd gear is reached.
2007 is the last year for the current R, the current S60 platform, and likely the venerable white block. But the R's engine is probably the ultimate iteration of it.
Even though it is now at the end of its run and there are newer, fresher competitors, some claiming more base hp, for my money the R is still a best buy at the price, which is well below $40k in many instances. It sells heavily discounted from sticker (mid to high $40s) for the reasons that follow.
The other thing an R gives is exclusivity. Only around 3,000 are made each year, and it is relatively rare compared to the fleets of BMWs and Audis around most towns. It's its own little club. But it is a contrary Volvo in the sense that it is a high-performance vehicle for a brand that distains performance for safety. Most Volvo owners would never own one, and most don't even know it exists. Volvo makes little effort to promote it. That only adds to its uniqueness in my opinion, and makes it a real sleeper to the unknowing masses. It is a quiet killer that can outrun a base Corvette in winter temps.
The most important aspect of owning an R is having a dealer that knows how to care for it. Because of the very limited production and rarity, most dealers do not know how to competently service it.
The R forum at SS is the home of the hardest-core R owners. They are the cutting edge as to mods and ways to improve the R's already formidable capabilities. While many there will post the various problems and quibbles they encounter, most folks don't post when things are right, most R owners don't hang out at SS, and most Rs made after 2004 are relatively reliable vehicles.
I hope this answers your questions.
