This is typical of what you might expect if you opt to run 205/55/16's on your 850 Volvo.
These pictures were taken after only a few thousand miles. The car is fitted with the Volvos Sport R suspension. No other suspension modifications were present on the car. Below are a few other pictures.

Do higher profile tires have a smoother ride? Yes. Will you ever notice it? Probably not.
It is a common misconception that a different wheel liner will fix this problem. On a normal 850 yes it will. On any R model thought this is not the case. The rubbing occurs with the sub, which is metal and can not easily be fixed. Just some things to consider before going to 205/55/16s.