Quicker acceleration from a dead stop, a little more responsive when driving around town, lower top speed, and lower MPG. Probably a good mod if you don't do a lot of high-speed freeway driving. If you have a 3.07 stock and wanted better freeway MPG you could swap to a 2.87 instead. Correcting the speedometer could be a nuisance though. :p

Note that later cars have taller ratios... the 86-89 300E has 3.07, 90-92 has 2.87, and 93-95 has 2.65. The station wagons have different ratios.