Cant add much more to what my colleagues had already said
Stock lights indeed can be artrocious but thanks to Fords genius design (only thing in this volvo&ford marriage I love) taking them out is literally 5 second job. Had a chat with 2007 S60 owner recently and he was cursing on the process of replacing simple headlamp bulb on his... :P
anyway - retrofit is always possible. Sometimes its even advised :P see my before and after pic, u will get it...
As FM said its a bit gray area (not MOT lega) BUT if retrofitted only projectors with H7, easy to revert back or just keep it H7 all the time. Or you can do like me and have separate set of headlamps for MOT purposes :P
btw stereo and your question - when you start the car it tells you what model it is (performance, premium, dolby PL2 etc). Although it lacks aux in/usb, the factory system is amazing, atleast in my Dolby PL2 version - 12 speakers with sub in the back - I never complained nor had urge to change it. If only it was easier to put external music in it.... eh... FM transmitter as said above -your cheap and cheerful friend :}