Heres a link (in Swedish though and it´s about an alfa),that explains what a DeDion axle is.I suppose it´s ALMOST the same as Volvo 340/360.
http://home.swipnet.se/alfamagnus/info75.htmI tried to translate the text.I hope you understand it anyway,i´m not that good at english.Some of the translations are directly from a dictonary so they might sound a bit odd,hope you´ll overlook that.
This rear axle construction is named after the inventor,the french earl DeDion.
The axle works like a regular stiff rear axle.A strong,light steelpipe (Half-shafts??) connects the wheels to each other.The differential is mounted to the frame and the driveshafts has propellershaft knods?? in both ends.This eliminates the weakness of a regular stiff rearaxle,the differential is not carried on the axle and is not part of the unsprung weight.This results in a car with very good handling that can be pushed to the limits and beyond at the racetrack.

/Michael