subject pretty much says it all, but here are some more highly subjective impressions about the two cars (a MBZ 2000 C230K Sport edition vs. 2004.5 S40 T5)
the extra horsepower (218 vs 175-ish) is very nice, even with geartronic, which I've heard isn't as quick on the up-take as a manual transmission (never drove a manual myself, so I find that it doesn't matter.) The automatic is good enough for me.
The S40 T5 drives like a BMW. It has a more rigid ride and feels sportier, even compared to my old Sports edition Kompressor. You can feel every bump on the road, which is definitely either good or bad depending on your personal tastes. I find it a lot more enjoyable and fun to drive, compared to the more 'cushy' softer feel of the C230K.
The two cars are approximately the same size, interior and exterior. Trunk space is similar, though the split fold-down back seats of the S40 will eventually help (when I go buy stuff at IKEA, for instance) The one place where the S40 compares unfavorably to my old C230K is on the driver-side leg room. There's a plastic 'bump' on the left side where the clutch would be, where I usually rest my left foot. This bump sticks out much too far for comfort and I can no longer stretch my left leg out as much as before. (pushing the seat back further isn't really an option, since then I won't be able to control the pedals with my right foot)
All the extra comfort auxilliaries are nice. Feels better than the C230K... audio sounds better. AC runs cold faster. Floating Center Console is just cool to look at... Having a CD player standard is nice. (I didn't upgrade my C230K with a CD player)
In the week and half that I've owned my S40, I've gotten numerous comments from people at the parking lot. One lady came up to me to bemoan her choice in swapping a volvo for an infinity and wants back, eyeing my S40 with obvious envy.

In short, I love the new S40 and definitely give it two thumbs up.