A nice video from "Feel Tennis" about how, and how not to hit the volley. I think many coaches use the wrong word when suggesting that a volley is a punching action..it is not, although it is one way to hit a volley. Look at the video below of The Fed, and see how he "feels" the ball on the racket - which of course is all about the grip.By laying the racket slightly open you can feel the ball more on the strings.
To develop the feel for the volley, try tossing a ball in the air, and catch it on the racket strings...then toss the ball and volley slightly up in the air so you can then catch it again. Also a great practice is to have someone feed or throw you a ball and the first volley you hit back to them (they should be around the service box line) so they can catch it, and then the next volley you make it bounce in front of them- so one volley deep one volley short, to feel what the difference is between the two.
To view the slightly different article on Feel Tennis, click the tenniszoo link