i have a 2000 S40 and every once in a while i see smoke in the rearview mirror--not necessarily when accelerating heavily, either. I get over 29 miles per gallon on the highway and it runs fine, so i'm just ignoring it to tell you the truth.

Have you found a solution? Mine does the same thing. Someone suggested replacing the fluid in the rack with a reconditioner and that a valve might be stuck there.

I have a similar problem, though my tires have lasted just fine. If you stop the car and turn it all the way to the other side of the drift side, it'll either go straight or start drifting the other way. I was told it might be a stuck valve in the rack. See my post below for response re: weird steer...