I ruled out the temperature sensor as the cause of sluggishness in my '88 260e. My Haynes manual gave resistance readings from pin to ground at various temperatures and the sensor checked out fine.
I also took a look at the temp sensor on my '92 300e and the plug was off. The car was running absolutely fine and the sensor had not been plugged in for who knows how long. This leads me to believe that the sensor may not have that big of a role in how the engine runs.
Regarding the O2 sensor, I have had a few Volvo's and learned on a Volvo Forum that I could buy a Bosch sensor for a 5.0 liter Mustang for about $40 and splice the leads and save almost $100 over the cost of a Volvo sensor. The sensors are identical except for the connector plug. I checked Fastlane hoping to find if the Volvo and MBZ M103 sensors had a common generic cross reference but no such luck....yet.
In the meantime, still driving a sluggish car.