I have a 94 940 turbo wagon with the same problem.  If I am not mistaken the
automatic transmission in your car is the same as used in the 700/900 series
so the link for the following Volvo FAQ should apply.  It explains what the
problem is how to correct it and speaks of an alternative solution where one
is treating the symptom rather than the actual problem.

http://www.brickboard.com/FAQ/700-900/TransmissionAuto.htm#ATFluidNeedsChangingL
ateorPoorShiftQuality

Basically it says that if you power flush the transmission and replace or
clean the filter and replace the automatic transmission fluid you are
treating the symptom and your problem should improve (not sure for how
long).  To treat the problem one has to have a single or a series of balls
replaced in the transmission which have worn down in size do to particular
or previous use.  Apparently it doesn't have to much to do with what one may
consider excessive mileage.

I myself don't know much about mechanics but there are a great deal of good
people here that do, perhaps they may chip in.

Myself I am considering the power flush and replacement of the AFT but am
wondering if using Synthetic AFT would be the way to go.  Seems to be
according to the following web-site.  Anybody have any pros or cons for
this?

http://www.gadgetonline.com/TransFlush.htm

Here is another site which I hope may be useful to you

http://www3.bc.sympatico.ca/Volvo_Books/faqtrans.html