Some answers:

1. Our union, LO, is a coalition of just about every union in the country. So yes, it DOES represent almost the entire workforce.
2. The leader is democratically chosen, and that leader also holds a place in the labour party's sentral committee by default(a very powerful position).
3. The organisation of LO is pretty much like this:

1. Sentral committee(the highest)
2. Leader
3. All the various profession leaders

4. The early wage negotiations work like Watchman said, except that the "referee" isn't the government, it's an independent guy(Riksmeglingsmannen/Countrynegotiationsman) with no interest other than getting the two parties to agree.
5. Strikes are an uncommon sight nowadays. This years negotiation was settled within the first couple of days...
6. One of the reasons stated why our model is working great for us, is that both employers and employees are working together here. There aren't any outrageous demands, especially not when the economy is hot. Like in this year, we have to hold back a little on consumption to avoid a crash, and so the union didn't ask for a raise for anyone else than groups who are very underpaid(like our nurses). The demands are usually very reasonable, so if there are any strikes, it's usually some random groups who feel they've been overlooked.
7. As for turning to the dark side of market liberalism, I was referring to our PM who sometimes has an urge to privatize stuff best left in the hands of the government. Like our electricity, in the 5(?) years since that sector was privatized, we've had 3 energy crashes... The price has gone up by 300% or so... We're "constantly short on water in our reservoirs"(water energy is our primary source), yet we are exporting like there's no freakin' tomorrow... And then importing back at twice the cost.... Does that sound clever to you? Anyway, it's not what we, as voters, expect from a social democrat. I blame Blair.