Well, here is an update on my 2002 c320. It went in for the A service, and the dealer "reset" the rain sensing option. It seems to have made no difference - sometimes it works great, and other times it will run fine for a while (maybe 15 minutes), then switch into an "always on" mode. The system on the e320 always works fine (sure hope I don't jinx it!).
Thanks to "Car Nut" for the link to Hella - I did not know this module was made by Hella. It was interesting to see how the system works.
Sometime soon I'll make a return appointment to have this looked at again - this is too cool an option to allow it to stay broken.
2001 e320 wagon
2006 Crown Vic