I think Jason has it right... if you want a car with no problems and a warranty that will keep everything right, don't buy a car thru eBay or from a private seller.
Every used car has risk associated with it... either you assume this risk, or pay somebody else to. In reality, you pay them to assume this risk anyway... that's why dealer sales are more $$$.
I bought my 1996 S500 Coupe (W140) sight unseen (except for digital pictures) over eBay in December and couldn't be happier with it. I got it for almost $8K below "book" and decided to take the risk. I made out... the car took about $1500 or so to get it right (a number of little things) and I pocketed the difference.
I also have assumed the risk of keeping it right. I've priced a third party warranty on this car (which nothing more than an insurance policy), and the price is rediculously expensive.
So, I think the answer to your overall question is only yours to answer... are you willing to take the risk of buying a car that may need extensive work? If so, eBay, and many other private sales can be a bargain for you.
I've bought two cars over eBay... made out on the S500; about broke even on a van I bought.
Good luck in your decision, KenP