The Germans recommend phosphorous-free due to corrosion and the Japanese recommend silicone-free due to waterpump failure. Mercedes recommends only their factory coolant. I have '87 560 SEL and have brought to the dealer for 8 years. The dealer only used MB orange coolant. In that time, I've had to replace 2 raditors. One was only 2 years old. How it affects the engine. Don't really know. However, I believe as long as it is phosphorous free and silicone free. It won't matter much, but change the coolant every year. You will reduce your risks for any cooling problems. Buy the MB coolant if you firmly believe in it, but the distilled H20 issue may hurt more than help. I read two articles about this and actually you add risk for corrosion. I have also used distilled h20 on one of my cars, but I saw that it was causing rust on the top of the inside grills of the radiator. Consider twice about the distilled h20, but the coolant issue is a long debated one. Normal drinking h20, such as bottled drinking h20 is better suggested, if your really that anal, but I use regular tap h20 now. You're causing more trouble for yourself, if you use distilled h20. If you don't believe me, then ask your local MB Service/Dealer and see if they use distilled h20. I am sure they don't