420SEL, (Jason), in reply to your question about timing chain stretch:
Remove both valve covers and rotate the engine until the crank pointer is on '0'. Observe the timing marks on each camshaft, and their relation to the mark on each cam bearing tower. If all is well, the marks will be aligned. The stretch in the chain will be illustrated by the misalignment of these marks.
I would worry more about the plastic rails in the heads than the chain. These fail from exposure to heat in the engine, and become brittle. They break and fall between the timing chain and the crankshaft sprocket, causing the engine to jump time. Pistons hitting valves, cats and dogs living together, its all bad! I changed my guide rails and chain at 125K miles and thought I had cheated fate long enough! At 180k, I would be thinking about it seriously.
In response to what improvements in engine performance: I thought mine ran smoother afterward, but that may be my imagination, as we all like to think after a weekend under the hood things are ALWAYS much better! But I did not have much stretch observed before the job.
Do a search on timing chain, and chain guides. There is plenty of info on that here.
My $.02 worth on this.
1989 560SEL (172k)
1989 325IC (122K)
2004 Suzuki Volusia LE (3500 miles)
2005 Yamaha Road Star (20 K miles)