The M119 engine is a wonderful motor. Idle is quiet and once it gets above 4000 rpm, it really screams. I think only 1 person on this entire board has had a head gasket problem on this engine. The 400E will be really fast compared to the BMW because of the massive difference in power. The w124 Mercedes are virtually bullet proof. Also, there are many more mechanics that know W124 and M119 than BMW motors. Plus, the availabilty of parts are abundant. But, if you know an excellant BMW mechanic then you might not have any problems. I don't know anything about BMW auto transmissions but I doubt if it is as good as the Mercedes. On my 5 Mercedes, I have never had any transmission problems nor have I had to swap out the engine harness, evaporator or head gaskets. Dont dismiss the m104 motor, compared to the new V6 it sounds much better, smoother and idle is quiet (no ticking).
Finally, the Mercedes is an E, its competition is the 5. So expect less space, less luxury, less comfort in the 3.