Just inherited a sweet 2001 xc70 with only 250K on her. When I go around corners if i have taken my foot off the gas it will slam back into gear when i start to accelerate. Local car fix it place says not the transmission and it might be a software issue in need of an "update" Does this sound possible?

sounds like low fluid, take it to someone who knows these trannys. 250k is a lot of miles on that transmission esp if its not ever
been worked on

Replace the transmission Servo cover... it has been re-designed then go to the dealer and have the software updated. Be sure to have your tranny fluid topped off that stuff is not cheap.