I do remember reading somewhere that Volvo updated the system so that instead of needing the dealer to apply map updates you could download them yourself. To do so on cars built with the older system needed a software update, which I guess is what they're quoting you for.
Might be worth ringing a couple of other dealers to see what they say about the price.
Mine cost ÂŁ97 back in March.
2 off software download control modules, ITP removed, IAM upgrade, loan car insurance.
Download failed twice, so they kept my car overnight to try again the next day after contacting Volvo.
Went in the next day, and they lent me one of the managers cars to get home, so I wasn't hanging about all day, he lived in Wakefield so he dropped off my car at home that evening.