Graeme,
I know from experience with a 164 with the same 3-speed auto box that it's a very poor, inefficient gearbox. I converted the 164 from automatic to manual, with no other changes, and the car felt like it gained 40% more power and returned much better mpg.
On the 265, you might want to stick with the 3-speed for ease or originality, but there are choices which would dramatically improve how it drives.
If I had bought that car I would convert it either to a late 760 4-speed overdrive auto gearbox (easy enough to obtain) or to a manual transmission.
The latter would be harder to find, but this forum member has the relevant parts for sale:
http://www.volvoforums.org.uk/showpo...3&postcount=11
John