There is a guy in the US who has done this to an XC70 (not sure which year, but post 2007, I think) he has taken off both tail light sections, each side, and used a dremel to chase out the outer edge to leave a channel into which he introduced strip LEDs.
The finished appearance is great; very similar to current Volvo LED setup where the rear view accentuates the hipped appearance. Very sexy! His write up is on the VolvoXC.com website complete with photos, including a video of the external rear view appearance. When I find the posting I will come back and edit here to leave a link.
Right here is one link:-
http://www.volvoxc.com/forums/showth...ED+tail+lights
Also, if you go to the original Russian web site for this topic and copy the URL into Google translate you can follow it perfectly. It is no good just using the PDF document and trying to translate parts of that. I think because of the text encoding. Every time I try it google Russian to English thinks I am posting Chinese characters!!!