I had the same problem w/ my '01 S40.  The locking mechanism is all plastic
and a little piece broke off that controls the trunk lock release button.  I
could hear the mechanism latching and unlatching when I used the remote but
the lock itself wouldn't be thrown.  The whole mechanism needs to be
replaced.  I didn't do it myself - the bodyshop took care of it from a
rear-ender so I don't know how much the part is but it looks to be a fairly
easy do-it-yourself job.

Rob