E320 ($46,950) comes loaded with the standard equipment buyers expect in this class, starting with fully automatic dual-zone climate control, a power tilt and telescoping steering wheel, 10-way power front seats, real walnut trim, a 10-speaker stereo, power windows with one-touch operation up and down, auto-dimming mirrors and rain-sensing windshield wipers.

E500 ($54,850) has been gaining sales ground on the E320 in recent years. For 2003, the V8's engine displacement has increased from 4.3 liters to 5.0 liters (hence the name change from E430 to E500), with a corresponding increase of 29 horsepower. Besides more power, the E500 adds standard equipment, including four-zone climate control with separate temperature adjustments for both sides of the cabin, front and rear, and the new Airmatic Dual Control suspension.

Our test car, an E500, came with several options, starting with the E-Class sport package (high-intensity headlights, dark-tinted glass and aggressive looking body cladding). It also had heated seats and steering wheel, a hands-free telephone package, the see-through, all-glass Panorama sunroof and a 420-watt Harmon Kardon stereo upgrade with six-disc, in-dash CD changer. These extras brought the sticker to $62,405.

All the options on our E500 are also available on the E320, and there are dozens more offered on both cars. Popular choices include radar-managed Distronic adaptive cruise control, which maintains a set distance from cars ahead, and the Keyless Go system, which can unlock the doors and start the car by touching the door handle and gear selector. Parktronic obstacle warning helps with parking and enhances safety by alerting the driver to objects behind the car. Also available: GPS navigation, a DVD-capable in-dash information management system; voice operation for the phone, audio controls and navigation system; ventilated massaging seats; and solar-powered interior ventilation. This is a luxury car, so there's even a power trunk closer.

By the first of the year, Mercedes will launch the mighty E55, performance-tuned by subsidiary AMG with a supercharged V8 producing 493 horsepower (and that's no typo). Expect a premium of at least $10,000 over the E500.

The E320 wagon continues, though it will be built from the old E-Class sedan at least through 2003. A wagon based on the new-generation E-Class should arrive by 2004.