Well, you can do a search on synthetic oils - there's been a million threads on this board. In short, they are better in most ways - better lubrication, last longer, clean the engine better, etc. They also cost about four times as much.
If you're going to go the 12K miles between oil changes, absolutely use synthetic. MB requires this now.
If you're going to have it changed much more often, then conventional is fine.
Now about that $100 upcharge. That's extremely ridiculous. The basic charge already covers the eight quarts of oil. Upgrading to synthetic costs about $3/quart more - so another $25. Even with a generous markup $50 is the most I'd pay. I recommend you call another dealer and/or a good independent to see how much they are charging. The $285 is inline with expectations, but the upcharge is robbery.