The 17 inch wheels have a shorter sidewall. Because the sidewall of the tire acts like a spring you get a slightly firmer ride with a little more responsive handling. Another way to accomplish the same thing would be to go to a higher performance tire and keep the 16s.
I drove S60s with and without the sport package and bought the sport package. The 16s had more mundane all season tires. The sport package had performance all season tires. You could tell the difference.
If you are going for a more comfortable ride, then stay with 16's. As someone posted above, the shorter sidewall will create a firmer ride, and depending on tread-
wear, it may not wear as well.
The car may be more responsive, but unless you are going for a different look, then you will be spending a lot of extra $, and you also get the increased risks of wheel damage from lower profile tires.
In addition to what others have said, the 235/45/17 tyre will be much more $, and if you go for ZR rated will probably wear faster, in particular if you use the added performance (ie. corner harder).
Much better responsre though!