Thanks for all of the replies. While it is true that the possibility of fires can be started from aftermarket accessories installed improperly, I guess there are still issues such as factory electrical problems. Its not just Mercedes either, but from all of the NEWER
cars I have seen on E-bay, it seems like it is more common on European cars. This seems like a problem that should not be a issue, especially on newer cars, but again, like some has mentioned here, it could be from aftermarket equipment or fraud.
Again, it is not just Mercedes- here are some other makes I have
seen on e-bay with damage that seems unusual:
There was a 2001 Volvo convertible with a underhood fire due to a fuel leak, a 2002 VW Cabrio convertible, with a underhood fire, as well as a 1998 Range Rover with a underhood fire. I know some of the Fords of the 1980s often had fires, because of the bad ignition switches that lead to one of the largest recalls ever.
The Japanese makes do not seem to have a problem in this area.
Chrysler corporation cars of the late 60s, 70s and 80s seem to often have a great deal of electrical problems and fires- due to poor electrical and carburators, on the older cars with carburators.
Here is the e-bay link to the once beautiful 2000 Mercedes S500, that got a little too hot. Also, as MBDOC mentioned about the blower motor regulator causing the fires on the 2000 S-class cars- note that this fire looks to have started near the blower motor area on the passenger side rear of the hood and the passenger side dash.
And here is a link to a fire damaged 95 S600 coupe.
The latter is not burned too bad, as most of the damage was confined to the rear part of the engine compartment, but the interior on the 2000 S500, is burned to a turn.