I own a 400E, yes the balance is not very good, excessive understeer in turns, makes driver feels the car much bigger than it actually is, this can be corrected by applying moderate throttle, the handling is far from nimble, the rear end is too light, aggressive driving in the curves can easily slip the rear wheels, the 2.24 differential also limites its off the line acceleration, so if you do a lot of city driving, I would think 300E is a better choice.
V8 W124's true fortune is on the highway, they were born for high speed highway cruising, there are few 4 door sedans out there can compete with 400Es, at 120kmph, acceleration is as brutal as 60kmph, ride is super stable even at extreme high speed. I just did a round trip between Ottawa and Montreal, I averaged amazing 9L/100km (25 mpg).
99 BMW 540i 6-speed 110K Km
03 SAAB 9-5 wagon 80K Km
92 400E (Sold) 245K km
Still missing the days with the Benz, it kept me busy.