My fold down front seat works just fine. The head rest goes below the glove-box. Move seat all the way to the rear while keeping the seat-back in an upright position. Pull the two seat release levers in the back. Now fold the seat forward and at the same time actuate the seat-back power lever making the seat-back move forward. This changes the angle just enough to allow the headrest to slip under the dash.
I saw a diagram of the whips system and it showed a solid piece of metal, or something, going all the way up the seat back to the top of the head rest. It's definitely part of the WHIPS and not removeable.
Also keep in mind that putting a sheep skin cover on your seat will interfere with your SIPS, specifically the airbag module that is located in the side of the driver and passenger seat-back. Volvo specifically warns against putting any kind of seat cover over the front seats.
JJ