I presume that you are speaking about the 300E?
White smoke is normally associated with water/coolant being lost through the exhaust system.
Look at the engine, on the right side by the exhaust manifold, especially the forward section. Do you see any signs of oil leaking or old leaks?
Another area to check is the transmission. Do you loose ATF regulary? ATF, a type of oil, dripping on a hot exhaust smells awful as well.
My guess is there is oil or ATF leaking onto the exhaust manifold, it is being burned and sucked into the cabin of the car via the interior fan. If it gets too bad it can saturate the ventillation sytem is then a nightmare to get rid of.
Keep us posted,
'03 E320 Wagon-Sold
'95 E320 Wagon-Went to Ex
'93 190E 2.6-Wrecked
'91 300E-Went to Ex
'65 911 Coupe (#302580)