Performance Improvements
New Transmission Software
I think the earlier models had a transmission software that always wanted to shift to a higher gear. Presumably to save gas. But this leaves the car feeling sluggish with the engine always below the 2000 RPM zone where there is little torque.
My 01 T5 got an updated transmission software in 2005 and what a difference it made. The shift patterns completely changed and it feels like a powerful car that it suppose to be :) The new shift pattern doesn't shift so early. Furthermore, the new shift pattern doesn't always shift into the next gear going up a hill, it often is in between gears giving you the right ratio where engine can provide torque.
iPD Turbo Control Valve and Silicon Hoses
This item basically allows pressurized air to start sooner resulting in a decent acceleration gain. I can't think of anything this cheap that enhances performance so much.
http://www.volvoxc.com/forums/showthread.php?t=15507
Some people say the improvement comes from old TCV not working well. Evidence suggest the hose changes may be the real impact. Here is some more info to help you decide what you want to do