Performance from the E320 is somewhat disappointing. Its 3.2-liter V6, which produces 221 horsepower and 232 pound-feet of torque, lacks the responsiveness of the other E-Class engines, including the new E320 CDI diesel. Nonetheless, the E320 cruises well at high speeds and the V6 is smooth and quiet. It can accelerate from 0 to 60 mph in 7.1 seconds, according to Mercedes, and that's more than adequate in the most hectic traffic situations.

New for 2005, the E320 CDI is flat impressive. It's turbocharged inline six-cylinder diesel engine features all the latest high-tech goodies, including CDI, the common-rail direct injection system, which delivers fuel to the engine at an incredible 23,000 psi, compared to 100-250 psi in the typical gasoline engine. Yet the technology matters far less than the results. Forget everything you know about diesel-powered cars built in the 1970s, '80s or '90s. Slow starting? Not anymore. Like all diesels, the E-Class version still needs electric glow-plugs to heat the combustion chambers before starting. Yet during our week-long evaluation, in early spring in the Midwest when mornings are more than cold enough to leave a coating of dew on the landscape, the E320 CDI never started more slowly than a gasoline engine. Indeed, we never saw the glow-plug indicator light. Certainly it might take longer to start in the dead of winter, but we can't imagine that it will require more than a second or two.

Unpleasant odors? You'll still get that oily diesel smell when you fill the E320 CDI's tank, but once the filler cap is back on and the car is running, you'll notice no unpleasant fumes inside or out of this E-Class. Excessive engine noise? At idle, during warm-up, you'll hear the rapid tick-tick of diesel noise more loudly than anything coming from the gasoline-powered E320's engine. But once the diesel is warm, there's very little difference in the amount of engine noise reaching the cabin compared to other E-Class models. The diesel engine is also surprisingly smooth, and the extra bit of noise comes with some excellent benefits.

Start with better acceleration. The E320 CDI's 201 horsepower is impressive by diesel standards, but that's not the half. This engine produces a whopping 369 pound-feet of torque, more even than the E500 gasoline V8, and it's the twisting power of torque that generates acceleration. Dip the accelerator pedal on the E320 CDI and it jumps, quickly enough to spin the back tires just by jabbing the gas, if you switch the traction control off. The CDI will leave the gasoline-powered E320 in its dust, up to about 90 mph. Moreover, the CDI engine breathes freely enough that it keeps pulling strong up to the transmission's shift points.

And that gutsy acceleration comes with outstanding fuel economy. According to the EPA, the E320 CDI beats its gasoline-powered counterpart by nearly 10 miles per gallon for both city and highway driving, estimated at 27 and 37 mpg respectively. Our test suggests that a 10 mpg edge overall is easily achievable in the real word. With predominantly highway travel, the CDI has a range of 600-700 miles per tank, so owners won't have to tolerate the smell of diesel fuel very often.

European engineers have wondered for decades why American drivers haven't taken to diesel-powered cars in greater numbers. The answer is simple: Compared to Europe, gasoline in the United States has usually been relatively cheap, and the economy advantage of a diesel has never been worth the trade-off. With the E320 CDI, we see no reason to choose the gasoline-powered E320, except perhaps the inconvenience of finding stations that sell diesel. As auto reviewers, we have never been willing to make that statement before. Analysts say $2-a-gallon gasoline is here to stay. With diesel selling for considerably less than gas in most markets, and the mileage advantage of the E320 CDI, the paradigm for the typical American buyer may finally have shifted.

For drivers who put a premium on smooth, exhilarating acceleration, there's nothing like the V8-powered E500. This V8 is sweet from idle to the 6000-rpm redline, and equipped with Mercedes' new seven-speed automatic transmission, the E500 flies. At a stoplight or from 70 mph, there's a deep well of torque underfoot, and plenty of acceleration. From the seat of the pants, the E500 feels like the quickest car going among mid-size luxury sedans, save the special high-performance models. Mercedes engineers say the E500 is even quicker than the original 500E, a limited-production, purpose-built sports sedan developed with Porsche in the early 1990s and still revered by auto enthusiasts today.

The 2005 E55 AMG operates on another plane entirely, with 469 horsepower and gobs of torque available from idle to 5000 rpm, peaking at more than 500 pound-feet. The power comes courtesy an intercooled Lysholm screw-type supercharger and advanced engine control electronics. No matter where or when you stab the throttle, the E55 rockets ahead. Mercedes says it will go from 0 to 60 mph in 4.5 seconds, reaching an electronically controlled top speed of 155 mph in about half a minute. Yee-ha!

The E500's seven-speed automatic transmission improves acceleration, performance and response, but it also enhances fuel efficiency when compared to a more common five-speed automatic. Gear changes are barely noticeable, especially in the higher gears. This transmission allows significantly quicker acceleration for highway passing situations. And it doesn't have to go through every gear: Step on the gas and the transmission will skip down to the appropriate gear, switching from seventh to fifth, for example, and from there directly to third, meaning two downshifts instead of four.

The five-speed automatic in the E320 and E55 AMG shifts quickly up or down in most situations, though it sometimes seems slow to respond in the E320. It doesn't hunt back and forth for the right gear, even in hilly terrain, and it rarely shifts unless the driver changes the angle of the gas pedal, which is good. When the driver prefers, an auto-manual shift mechanism allows a high level of control over gear selection. Toggling the shifter left or right, the transmission shifts quickly up and down at the driver's discretion. The system will hold the selected gear indefinitely just below the 6000-rpm redline, but it won't let you bump the engine off its rev-limiter without shifting up a gear. Should the mood strike, a driver can run through the gears or challenge a curving stretch of road almost as if it was a fully manual transmission. Most of the time, however, we simply put it in Drive.

E-Class cars corner responsively and provide a smooth, if slightly firm, ride. It's the balance we prefer in luxury sedans. The four-link front suspension is similar to that under the expensive S-Class models, and the five-link rear suspension does a superb job of controlling unwanted wheel movement, which is crucial to handling and ride quality. The E320 CDI is available only with ordinary all-season tires, but the other E-Class models are available with bigger, wider wheels and higher-grip performance tires that are better for warmer weather.

The Airmatic Dual Control suspension comes standard on the E500 and with the optional Sport package for the E320. Airmatic, or ADC, replaces conventional steel coil springs with air springs. This computer-managed system adjusts the air pressure to the spring at each wheel, based on road conditions or driving style, to slightly soften or firm the ride and to add or decrease body roll (lean) in corners. In combination with electronically adjusted shock absorbers, the air suspension can automatically improve ride quality or handling or optimize the balance of the two, depending on where the car is traveling and whether the driver is cruising or driving quickly. The system works automatically, without switching suspension settings between sport and comfort.

The Mercedes E-Class has quicker steering than some cars in its class, and its variable-power steering system works well. There's more boost for easy turning at low speeds, and less for more progressive steering response and feedback at higher speeds. The light steering makes maneuvering through crowded parking lots easier and more pleasant. Overall, the current E320 is far more pleasant to drive than the previous generation. This E-Class feels more agile and responds more precisely, in the fashion of a BMW. The E55 AMG supersedan has different suspension calibrations and different ABS and ESP settings in its software, deliberately changed to allow the driver to push the car to higher limits before electronic intervention occurs.

The E-Class cars have excellent brakes from a performance and safety standpoint. All feature Sensotronic Brake Control, commonly called brake-by-wire. The connection between the brake pedal and reservoir of brake fluid is electronic, not mechanical. The advantage? The electronic system can apply brake force to each wheel independently, helping to keep the car traveling straight and true during panic stops, even on bumpy, uneven roads. It will also keep the brakes on full in an emergency situation, as measured by sensors, even if a driver inadvertently eases off the brake pedal. And if it's raining, the system periodically, lightly, applies the brakes to sweep them dry. The E-Class models have progressively larger brake rotors, depending on the engine's power and corresponding speed potential. The brakes on the E320 are excellent in terms of performance. This car stops straight, true, and short, with no drama whatsoever, and will do so repeatedly with virtually no brake fade. Still, the brake-by-wire has its quirks. Several testers found them difficult to modulate in everyday driving, making smooth braking around town a challenge. The brake system is smart and will learn your driving style, so they should improve as you learn them and they learn you.