I don't know about that engine, however the D3 is more than enough to give a good feeling, so you will be fine with it. D3, D4 and D5 are all Volvo engines and reliable.
Of course you should change all fluids after buying the car. I did it with my S40. I also replaced the shocks (that car is not light either).
You should read around this forum, you will find lots of useful information.
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