Thanks for all the input on this - lots of comments there, which are really helpful.
Having read the Skoda reviews, I am slightly more interested in them now (I agree that they really seem to be the logical choice). However, my other half stands firm on them being the only cars she won't drive - illogical, yes, but I will have to live with that.
Volvo V50 is indeed rather small and all petrol Volvos from that generation are notoriously uneconomical!
Skoda or Mondeo really sounds like the most logical purchase here. Unless you'd like to die from boredom driving a Passat.
If you're a badge snob then get an Audi, but they'll be expensive for what you get.
You could look at a SEAT Exeo, but the boot is only 30-40 litres bigger than a V50.
It is really interesting that you mention the fuel economy. Totally agree - I was expecting a 2009 1.8 manual to have much better mpg than it does. It is only slightly better than the 1995 C200 automatic petrol merc that I used to drive.
Talking of which - what are your thoughts on diesel vs petrol at the moment?
The last time I looked, the two fuels were exactly the same price. I know that the government are trying to get diesels off the road by increasing tax on them, but the extra mileage, you get from diesel, should even that out. However, if diesels prices start go well above petrol again, it might become more expensive to run a diesel, overall.
Furthermore, given I only do around 8,000 miles per year, is a diesel a bad idea for me, generally?