I am not an expert on the subject (like I am on everything else) but MB did change the system at some point during the 2000 MY production run. I think it was around the end of '99.
I have a Nov. 99 build S500 and I had the exact same problem. I took it in to the dealer for either the A or B service and just mentioned to the service advisor that the A/C sucked (I live in Dallas) and they retrofitted it. An easy way to tell is the newer system has an ACoff button whereas the original system had a different button (PWR I think - can't remember).
The system is now vastly improved and has no problems even with 100+ ambient temps that we see occasionally (all summer) down here! It involves a different evaporator and about 10 other parts, including the previously mentioned change to the control panel, per my invoice.