E320 is slightly bigger than the C280, but not by much. They are basically the same speed, acceleration-wise. But the C280 is more agile; it's a smaller car, and weighs 500 +/- pounds less.
You can expect to get slightly better gas mileage with the C280, but nothing big.
And I have never ever seen a C280 without leather, but maybe that's just because of where I live.
But the things I like better about the C class (though it was the small MB sedan) is that it has newer features inside. The instrument cluster has digital odometer, trip odometer, clock and ext. temp gauge. The climate control is newer and updated, and you can get all of the read-out values out of it. And the air-condition in the C 202 is one of the best MB ever made, very trouble-free.
Both cars are great though, and it all is a matter of personal preference. I chose the C-class because it was a little less outdated (not that the E320 124 is that outdated), and the newer features attracted me. Plus I like the styling of the C more. But again, both cars are great and it's a personal choice.
2006 E350 w/ 155k miles (Daily Driver)
1993 300E 3.2L Sedan w/ close to about 300k miles
2003 E500 Brilliant Silver (Had 217k miles when totalled!)
1989 300E with 289,000 miles (had for <1 yr while in HI)
03 CLK 500 cabrio (Mom's)
2006 C230k (Dad's)
1999 S420 (Mom's/Dad's)
2000 C230k Sport sedans
2001 CLK320 Cabrio (Mom's)
1995 C280 My First Mercedes-Benz... (155k miles. EXCEPTIONAL AUTOMOBILE. Was Very hard to let go of!)