The engine used in the 2.4i versions is a modified version of the five-cylinder engines that Volvo uses in its larger sedans, wagons and SUVs. Most of the external components, from alternator to manifolds to air conditioning compressor, have been designed for a compactness that makes the transversely mounted engine package 7.8 inches thinner and 1 inch shorter. This was all done in holistic pursuit of building the frontal deformation zone for crash safety. It's a modern dual-overhead-cam engine with variable camshaft timing.

The turbocharged engine in the T5 is wonderfully smooth. Its acceleration is quick and linear, with a broad power curve allowing it to evenly gain speed throughout the rev range. But it should be good; it's the same size as the S60's engine yet it's not being asked to make as much horsepower. At 80 miles per hour, with the five-speed automatic transmission, it's only loafing along at 2500 rpm, so there's a lot of power to spare.

The T5 is comfortable at high speed, very stable and relaxed, something we learned in the wide-open California desert where we were able to open 'er up. The T5 feels ready and eager for spirited driving. This is one small car that can be a great Autobahn cruiser, able to run with the big boys, the expensive 130-mph BMWs, Mercedes and Audis. It was so stable at high speeds it didn't feel like a front-wheel-drive car at all.

We couldn't have been happier with the electronically controlled five-speed automatic transmission. The upshift from fourth to fifth gear was so smooth that we only knew it was happening by observing the tachometer needle drop. The automatic features a manual shift mode called Geartronic, and in the manual mode, it actually let us control what gear we wanted to be in, without stepping in and overriding our wishes. It's the same transmission that's used in the 300-horsepower S60R, so it's bulletproof in the S40.

The sport sedan and wagon use the same suspension design as the S60 and S80, with geometry that has been calculated for quickness and precision. We drove for a stretch at 30-40 mph over a terrible surface with a lot of big rough patches, and it was clear the suspension was firm but it was never jarring. We could feel the wheels moving, but it wasn't getting to our hands or the seat of or pants, or the body of the car.

We drove up into the mountains over a fast, smooth and winding road, with lots of hard braking and abrupt changing of direction. In that situation the suspension approached its limit and stiffer would have been nice; but that situation was already faster than 95 percent of drivers will take even the T5. The S40 suspension wasn't made for that, as it shouldn't be; if it were, it would have been uncomfortable on the slower and rougher surface. Every suspension has a range, and the S40's range is right on the money. The available Dynamic suspension has slightly stiffer springs and bushings (about 20 percent, according to Volvo).

The steering is electro-hydraulic with light, distinct and controlled feedback. We took those words verbatim out of the S40 press kit. This is something we wouldn't normally ever do, but it's perfectly true. Our own notebook words were: "firm, tight, the right amount of resistance." The torque steer normally inherent in front-wheel-drive cars was minimal to the point of insignificance. Years ago it was a problem in Volvos, as it is in many powerful, front-drive cars, but engineers have been whittling away at erasing it with improved halfshafts and universal joints.

We used the brakes a lot, and they were strong, smooth and true. The ventilated discs are plenty big for the size of the car, at 11.8 inches front and 10.9 inches rear. We performed a panic stop at 75 mph, and the ABS dragged the car to a stop in a direct and confidence-inspiring manner. We found the brake pedal a bit too close to the gas pedal for effective left-foot braking, however.

We also got nearly two hours of seat time in the 2.4i, and were surprised at how well it held its own against the T5. Almost all the same impressions hold true, only to a lesser degree. It looked the same, except it didn't have those great 17-inch wheels. The 168-horsepower engine didn't feel like 50 horsepower less than the T5. The suspension lacked the dynamics of the T5 with Sport package, and the tires weren't wide-profile 17-inchers, so it couldn't be pushed as hard as the T5; but overall it was nearly as much good car. Brakes are the same for both cars. In short, the 2.4i models are an excellent choice.