It’s the same, exact, transversely mounted, 4.4-liter, 315-horsepower, Yamaha-built V8 under the hood of the much larger and heavier XC90 SUV. But in a thousand pound lighter vehicle — coupled with Volvo’s proven Haldex computer-controlled all-wheel-drive system (AWD) and 325 pound-feet of torque, this car is a stellar performance machine.

The S80 has moved more upscale and is priced higher than before, but this new car also has more standard equipment and more powerful engines. It’s positioned head-to-head against dominant market forces like the BMW 5 Series, Lexus GS, Audi A6, Acura RL, Mercedes E-Class and the Infiniti M35 and M45.

I had an opportunity recently to put the new S80 through its paces in the desert outside Las Vegas, doing an all day run up to the Lake Mead area and back. As fond as I am of a couple of its competitors, I still came away impressed.

Walkaround: The 2007 Volvo S80, while appearing similar to previous models in much the same way Mercedes has patented that ageless look, is actually all new outside. It boasts a much larger grille, domed hood, larger headlamps, sporty bumper and under-grille treatment, an entirely new rear end treatment with larger taillamps and a sportier bumper, as well as a redesigned roofline ala the S60 and S40 for significantly reduced wind resistance.

While the overall length is the same as the 2006, the 2007 S80 is taller, wider, rides on a longer wheelbase, sports a wider front and rear track, with less overhang for improved stability and more interior space.

The freestanding center stack, borrowed from the smaller S40 and V50 and upgraded accordingly, connects the dashboard and console, and is home to a 160-watt, eight-speaker sound system that plays MP3 files and has an auxiliary input for iPods and other music players. A five-channel, 13-speaker Dolby Pro Logic II surround-sound system developed in-house with Bang & Olufsen and Dynaudio is also available.

Instrumentation follows Volvo’s traditional design, but everything is new, with a more classic and less industrial look than previously. The optional navigation system rises up out of the dashboard like it does in the XC 90 and XC 70, using either new controls mounted on the right rear of the steering wheel or via remote control.

The seats, rearview mirrors, climate, audio, navigation, and, the amount of steering wheel feel in the car’s speed-dependent power steering system can all be personalized and remembered electronically.

Options: Option packages include the Sport package with 18-inch alloy wheels and 245/40R18 tires and speed-sensitive steering with three-way adjustable steering effort. An audio upgrade includes a six-CD changer, MP3 player, auxiliary input and USB. Other options include satellite navigation with remote control, Sirius satellite radio, adaptive cruise control; front and rear park assist, dual-screen rear-seat entertainment system, run-flat tires, and pearl or metallic paint.

Under The Hood: The V8 is certainly the big news, but there’s also a completely new 3.2-liter inline six-cylinder engine — the largest inline-6 Volvo has ever built. It’s rated at 235 horses with 236 pound-feet of torque. Unlike the V8, which is only available with AWD, the I6 is available with front-wheel drive as well as AWD. Also available soon in the U.S. will be a 185-horse, inline, 5-cylinder diesel.

Transmission choices include a 6-speed automatic or 6-speed stick.

Safety and Technology: As you would expect, the S80 is absolutely loaded with safety systems, expanding on Volvo’s worldwide reputation. Beginning with the interesting new key fob dubbed the Personal Car Communicator, it can lock or unlock the car from up to 110 yards away; tell you what state the locks are in; activate the alarm; and sense the presence of a human heartbeat inside the car.

Safety design also includes a patented body structure with a three-zone safety cage; the aforementioned radar adaptive cruise control that brakes the car without driver action — the first Volvo to offer this; a collision warning system with pre-braking: and the new optional BLIS or blind-spot information system that senses vehicles in the right and left blind spots and delivers a warning via a red, LED mounted on the interior A-pillars. There’s also ABS, traction control, yaw control; front airbags; new dual-chamber side airbags, with one chamber for the hips and one for the chest. The headlamps are now active xenon lamps that follow the road around curves.

Behind The Wheel: At high cruising speeds, the cabin is quiet, with a slight bit of wind noise. I was extremely impressed with the overall performance of the V8 engine, which sounds quite a lot like an American muscle car V8 when first fired up. I’ve driven it in the XC90 and was impressed, but this is a whole other experience. It delivers rapid, smooth, acceleration and can quickly hit and cruise at 100+ mph.

I also drove the new I6 and was pleasantly surprised at how well it accelerates and moves the S80 as well.

The evolved 4C Volvo chassis system features adaptive shock absorbers adjusting every second according to inputs from the road and the car itself. The system has been upgraded to three driver-adjustable settings — Comfort, Sport, and Advanced.

I also tried the new dashboard-adjustable steering effort control, and found a setting to my liking. With the steering set, I tinkered with the chassis settings on different types of terrain, until I found the combination that made driving the S80 sheer pleasure — tight, quick to react, flat in the corners, with the V8 impatiently itching to accelerate out.

Whines: The nav system steering wheel controls are unintuitive until you figure them out.

Bottom Line: I think this is the best overall Volvo yet. It’s beautifully crafted, elegant and quiet inside, yet very powerful, surefooted and handles like a sports sedan. There simply aren’t any rough edges on the new S80, and like when the XC90 debuted, the competition should be very nervous because the new S80 is going to capture market share from all of them.