I have exactly the same steering issue on my new (to me) '03 XC90 - pulsing feeling in the steering wheel when going around corners.

The pas fluid was low so I have it topped up and this seems to have lessened the effect, but not completely cured.

So would maybe seem to indicate the rack is on its way out??

Have a word with these guys for a recon rack - I've just had one off them and they're cheap, very helpful, supplied the correct part (mine was quite rare apparently), and it looks to be a thorough overhaul, not just a quick flash over with some paint.

http://www.carparts-direct.co.uk/steering-racks