The pressure reducing valves were at least used for the models including 1996 through at least part of 1999. It very well may have been on most if not all models from 1995 all the way to the end of Cougar production in 2002.
It is easy to identify on the car. It is between the end of the steel line and the rubber flex line sort of at the front of the rear wheel well. They are about 2" to 3" long and roughly the diameter of your thumb.
Both drum rear brake cars and disc rear brake cars had them. Both ABS and non ABS had them. The drum and disc systems used the same part number, and the ABS cars had a different part number. I can only guess that the ABS valve must have been able to accomodate the rapid fluctuation of pressure generated during an ABS event. The EBD equipped cars may not have had them, I don't know.
I am not fully aware of the details of how EBD works. I received the service managers overview when Volvo introducted it. Basically it uses the ABS system to control rear brake pressure and can apply the rear brakes much more agressively under some circumstances. On some cars (including the Volvo when it was first introduced) it made a banging noise when in use. The noise was unlike the rapid pounding of ABS, more of a two or three repeat "pop pop pop". When driving cars with EBD I cannot tell the difference between them and a non EBD equipped car.
Other than trying a new set of valves, I would not recommend messing with them. I have driven cars with the rear bias was too high and it can be really dangerous.
The technical information posted by the two brake experts is far more than I can provide.
