its either the thermostat or the water pump, I think it could be the thermostat, but sometimes the water pump can itself pump less at slower speeds and more at speeed and can also cause those symptons.
When I've had thermostats need replacing, the car would run hotter but not drop or raise up at least not to my knowledge, of course when going faster, the air also helps to cool it.
Either way, get it looked at by someone who knows about cooling systems and knows mercedes. You don't want to overheat the engine and end up with an expensive repair job.
I'm not a tech, but this is what I know from my experience with cars and temperature problems.
hehe
Alon