The best diesel is...the VW TDI. Sadly, it's the only diesel available in a passenger car in the US these days, but it's an outstanding engine. I am amazed and disappointed that Mercedes Benz (and BMW and Audi and several other European companies) can not or will not import its newer diesel cars to North America.
I spent a lot of time looking for a good used Benz diesel last year. I really liked a 1987 300SD (turbo six cylinder), but the owner decided he didn't want to sell it. I have heard good things about the 2.5 liter turbo five, but we never found one to drive. I suspect that diesels are probably like gas engines in that the newer they are, the better they work. Clearly, there is no comparison between the VW TDI in my daughter's 1998 Beetle and the 3.0 liter turbo five in our old 300D. Instant starts in any weather, quiet, smooth, no smoke, outstanding power and economy. The TDI, that is!
John R. Boyce