Hi Alan,
We tow with a V70 D5 AWD and we're more than pleased with car both when towing and solo. We've got self-levelling rear suspension (can't remember whether it's standard or an option) which makes for very stable towing. AWD is a permanent 4 wheel drive system with traction directed to wheels that have grip - works well when pulling the van off a wet CL (and when being a tad more enthusiastic in wet corners...). We've got the SE version which includes loads of stuff such as leather, climate control, cruise control, in-dash 6 CD etc... and the most comfortable front seats I've ever sat in - makes long drives through France totally relaxing. We'd thoroughly recommend the car.
Hope this helps, Simon