I have a '96 850 Turbro. I have similar issues with my heat and a/c.

Heat- When it is extremely cold, the heat rarely comes on. Otherwise, the heat may blow extremely hot air for 10 minutes. Then it will start blowing out cold-warm air. Sometimes the heat is working fine, but if I make a stop and turn off my car, when I return, I often won't get any more heat. Also, if it's blowing hot air and I turn the temperature down just a little, it will go completely off.

A/C- When it's extremely hot, the a/c has trouble coming on. Like the heat, it will blow out cold air for a while, then later, it will turn into a warm breeze. Some times the cold air comes out ridiciously cold and I attempt to turn the termperature up (or have the air blowing at my feet only). However then, the a/c goes out completely. On a long road trip I have to usually make adjustments every ten minutes in order not to pass out from the heat. Often I get a cooler breeze from rolling down my windows.

HELP!!! I'm taking the Volvo to the mechanic this week, but I just want to see if any one has had similar issues, and what corrected them. Again, this is both an a/c and heater problem.

 

I would say you have 2 problems.
1.Bad thermostat
2.A/C compressor needs to be reshimmed.

 

+1 Tech... and I'd take the time to blow with compressed air the little sensors which I believe on the 96 are still above the assist handles above your head in the front seat (both sides)... or are they behind the map light console on this model year?... either way, they can get dusty and dirty and cause grief.