Hi MBenz (Steve)
I have driven some C-class and E-Class .
And I think E-class with upgraded performance tires has worse effect compare to C-class.
I have a friend who has a 96 E 320 with eibach spring and bilstein shocks. He has 18x9.5(s) and 265/34/18 P-zeros on the back.
The rear feel like swinging even when you go straight and hit a bump on the road. (not just when cornering)
I also felt this swinging when cornering on My 97 C36, but not as bad as his E-class. (lowered with H&R and stock shock, 255/35/18 on the back, thinking of changing the stock-shock to bilstein or Koni shocks)
The class will have this nervous behaviour more obvious when cornering. But I can feel it on my friend E-class even when it goes straight line.
So overall I feel this nervous behavior more on E-class compare to C-class.

I think the wider or stickier (performance) tires you have on the rear, the more effect you will fell it. Because right now I am using snow tires with 225/45/17 all around, and I still felt this nervous behavior but not as bas as when I am using the wider tires.
I think this is a flaw in mercedes rear suspension. I really do hope that there is a way to overcome this.
On the contrary for the new C-class though.
I have test drove the new C-320(W-203) 2 weeks ago, and I feel that the handling is a lot tighter but yet not harsh at all.
I am especially happy with the steering response(Rack and pinion , finally, yes..!!) .
Being a fellow BMW fans that I am , I am quite impressed with the the overall improvement of the new C-class(handling and ride). It is better than the W202 for sure.

Thanks again MBenz for you input and effort in trying couple diferents set-up in your rear suspension. Now that I know that I am not the only one who felt it, I feel much better now (and I Thought there was something wrong with my car)

Greetings,

J Irwan