Just as a data point:
I always use a silicone-based paste like haasman described.
Never a squeal problem since.
I have never tried the grease method MB specifies.
I'm not sure that is a factor here or not, though I started using the silicone stuff 15 years ago when I had squeal problems on a 450SE.
Another possible remedy would be to try a different brand of pads. Squeal potential certainly varies depending upon the pad compound.
1986 300E 5-Speed 240k mi.