The easiest way to answer you is to compare a car of let's say 10 years ago with today's. Older cars used to suck air from the engine bay as the airfilter was mounted on top of the carbutor, which used to sit on top of the engine. In hotter climates this resulted in the engine sucking in extremely hot air, obviously. Simple maths predict that cold, dense air contains more oxygen, providing better combustion. Hot air - as in the engine compartment - inhibits performance.
"Cold air intake" is simply some sort of a tube extension from the air intake point on the engine (intake manifold) to the front of the vehicle where "fresh and cool" air is drawn in.
A further extension of the "cold air" concept is moving the air filter away from the engine's heated environment as well. Take the 10 year old car again. Because the filter sits on top of the engine, the resulting heat from the engine will heat the filter up as well. Mounting the filter forward in the engine bay where fresh air from outside enters the engine bay will result in a cooler airfilter. Modern cars have their filters moved away from the engine in any way, mainly due the fact that they are fuel injected (so the filter is not linked to the location of the carburator).
The result is that most modern cars have 1) their filters moved forward and 2) "cold air intake" as standard design. The only "restrictions" that you will find here are the diameter of the cold air intake tube, and the air filter element itself which is designed to provide filtration in the most dusty environments in the world.
Given the above, I would think that replacing your (restricting) air filter element would probably be as far as you have to go to see an improvement in your Volvo's performance (except for extreme measures like new engine management chips etc.).
Older cars do however benefit from "cold air systems" as both the point of air intake and the air filter are moved into a cold air stream (the front end of the car). The standard paper type filter is also usually replaced by a "free-flow" filter element from a manufacturer like K&N and Remus. "Free flow air" is at its most effective when it's combined ith a "free flow" exhaust system - on older cars! I know of cars with thousands spent on them in terms of freer air and gas, with not a single hp extra. Why? Electronic engine management systems set to deliver a pre-specified hp rating.
Do remember though, that air can also be TOO cold, especially in colder climates.