Volvo has been almost synonymous with wagon since the company began selling cars in the United States in the 1950s. In many respects the XC70 is a conventional station wagon, and closely related to the Volvo V70 (also all-new for the 2008 model year). Yet the XC70 is different. It comes standard with fulltime all-wheel-drive, and its suspension is raised to increase both movement range and ground clearance. The XC70 also features dent-resistant lower body cladding and protective skid plates underneath, as well as an electronic system called Hill Descent Control, which makes driving down steep trails easier and safer.

We found the XC70 offers as much off-road capability as most sport-utility buyers will ever need. It can handle some fairly rugged backcountry trails, and it's rated to tow up to 3300 pounds, which is enough for a small boat. Its maximum cargo capacity of 72.1 cubic feet is on par with some mid-size, truck-based sport-utilities.

Yet the XC70 doesn't extract a significant toll for its off-road or cargo-hauling potential. It's maneuverable and quite comfortable on paved roads, where most of us drive most of the time. It isn't the most exciting vehicle to drive, and probably not as sporty as Volvo's V70 wagon, but it makes a good grand tourer and great daily transportation. It rides smoothly and doesn't float or lean excessively through the curves, and it should deliver better real-world gas mileage than most mid- and full-size truck-based SUVs. On gravel roads and rough, unpaved roads, it handles well and is fun to drive, making it an enjoyable companion in the backcountry.

Those familiar with previous XC70s will have a good handle on the new one's basic potential. Still, the 2008 model is new from the wheels up, and better than its predecessors in just about every way. It's the first XC70 with a six-cylinder engine, rather than a five-cylinder. Volvo's new 3.2-liter inline-6 generates 235 horsepower and 236 pound-feet of torque, which is on par with most engines of similar displacement.

We prefer its styling. The new design is tighter and probably not as odd, though it still has the rugged, outdoorsy look many buyers embrace.

Inside, the XC70 has one of Volvo's best interiors ever: very Scandinavian, and elegantly understated. More important, it's easy to master its multitude of controls, and it's simpler and more efficient than many of its European luxury competitors. The 2008 XC70 has more room inside than the 2007 model, and it comes well-equipped compared to some other vehicles in its price range. The seating arrangement is flexible and the cargo compartment has tie-downs and other useful accessories. With the rear seats folded, the XC70's flat floor and low lift-over height make loading bulky cargo easier than with many SUVs.

Finally, the 2008 Volvo XC70 continues the brand's longstanding emphasis on safety. And it has more standard safety features than the previous-generation model. The essentials come standard, including advanced multi-stage, multi-compartment airbags, seats designed to limit whiplash injuries, electronic stability control and the latest anti-lock brake (ABS) technology. New safety options include a blind spot warning system, and radar-managed accident avoidance package and built-in child safety seats that adjust as children grow to optimize crash protection.