I have purchase many things from ebay including one car; an '89 300TE. I think a lot of the previous posts bring up good points but fail to reach the appropriate conclusion. Is buying from ebay a risk? Yes, but so is buying any car. Some situations are simply more risky and some less. Buying a car, unseen and uninspected, is clearly higher risk. So what? Just make sure that the price you pay reflects an appropriate discount compared to that risk.
I had some questions about my car which couldn't be easily answered as I would have needed an inspection 1300 miles from my home. I simply valued my bid against the possibility that the car would need extensive work and made sure that the amount of my bid + the potential repair costs + the cost of delivery = a fair price for that car with those repairs. The result? I got a fair deal. The car was inexpensive, but did have some problems which should have been disclosed but were not (leaking radiator, struts starting to go). Thus I would say, depending on your risk tolerance, go for it with your eyes wide open. There will always be another Last-Greatest-Deal.
Two final points. Personally, I'd buy form an individual rather than a dealer. I think the inherent amount of trust you can place in a person exceeds that which you can place in an institution. However, I know that both can cheat. Second, be prepared to fly immediately to pick up your car. Don't pay a deposit (usually one isn't needed for a few days; by then you should be there). Bring an exact copy of the ebay ad which listed the car. If the car does not match the ad description, go back home or re-negotiate. If it does, pay your money and enjoy. As an attorney, a lover of MB's and as an ex-used car salesman, I have other thoughts on these issues. If your interested, contact me.