The Volvo V50, and S40 (2004.5) are Volvo's first P1 cars, and share a
common platform with the Mazda 3 and Ford Focus.  Volvo played a
significant role in designing that platform.

Different engines, transmissions, and presumably different handling (if
Car & Driver is to be believed -- I've never driven a Mazda 3.  The V50
handles beautifully, and will be my next car.)

I don't think it has changed.  It may have improved.  Jaguar's styling
and quality has been better after Ford took over, and I think the Ford
Volvo's (S40 2004.5 and V50) are very good cars in terms of design and
performance.

Beverly

Yes, but the similarity ends there.  The engines are different.  
Everything else is different.  Many models share chassis but that is
where their similarity ends.  The chassis is just the metal structure
that holds the sheet metal and running gear.  The interior and running
gear can vary greatly.  For example:

The Mazda 3: Base sedans use a 2.0-liter four-cylinder engine rated to
produce 148 horsepower (144 in Calif.), while the upgraded "s" models
use a 2.3-liter four-cylinder that bumps the horsepower number to 160.
Both engines can be equipped with either a five-speed manual or a
four-speed automatic transmission with manual-shift capability.
Length: 178.7 in.
Width: 69.1 in.
Height: 57.7 in.
Wheel Base: 103.9 in.
Ground Clearance: 5.7 in.
Curb Weight: 2762 lbs.

The Volvo S40: Base and LSE models come with a turbocharged 1.9-liter
four-cylinder good for 170 horsepower; a five-speed automatic
transmission is standard. The 2.4i comes with a naturally aspirated
2.4-liter inline five-cylinder rated for 168 hp. Buyers can choose
either a five-speed manual or five-speed automatic to go with it. The T5
gets a turbocharged 2.5-liter inline five that makes 218 hp and 236
pound-feet of torque. In addition to the automatic, the T5 is eligible
for a six-speed manual gearbox. T5 versions are also available with
all-wheel drive, so long as you select the automatic transmission.
Length: 175.9 in.
Width: 69.7 in.
Height: 57.2 in.
Wheel Base: 103.9 in.
Ground Clearance: 5.3 in.
Curb Weight: 3082 lbs.

The Ford Focus:
The standard drivetrain in hatchbacks, wagons and all sedans except the
ST is a refined 2.0-liter four-cylinder rated for 136 hp (130 in
California emissions states). The ST sedan features a 2.3-liter four
good for 151 hp. A five-speed manual transmission is standard across the
line, and a four-speed automatic is optional on all but the base S ZX3
hatchback and the ST sedan. Fuel economy is average for this class, as
both engines have EPA mileage ratings in the mid-to-upper 20s for city
driving and mid-30s for highway travel.
Length: 175.2 in.
Width: 66.7 in.
Height: 56.8 in.
Wheel Base: 103 in.
Ground Clearance: 6.2 in.
Curb Weight: 2677 lbs

Ford owns controlling interest in Mazda and Volvo, the only 2 things they
have going for them, imho, sorry to the rule Britannia guys, the rovers and
jags are a money pit!

The 3 cars you cite all have the same platform with differing tuning.  The
focus is set up as a cheep car, the Mazda 3 is a premium small car with zoom
zoom zoom, and the Volvo seems from looking at it and reading reviews to be
quite Volvo-like.

Test the 3 and the s40/v50 and if the Mazda is fine save some bucks, if not
ya gotta go for the Volvo.

Both use the european Ford Focus chassis, not the one we get here in NA...
Volvo implemented their own safety systems, braking systems, interiors,
pretty sure the suspension, volvo engine, tranny etc etc... Mazda has mazda
engines, mazda interiors, multilink rear susp, "triple H" safety cage, not
the same as Volvo's. I drove the Mazda 3 a few months ago, it was a nice
car... apparantly the Volvo drives even better.