95' E320 and the Metra 70-1784 Adapter
 

Pulled out the original stereo with the 2 separate harness plugs (small & large one) and the clip on wire in the lower center (understanding it's to set the code alarm).

I'm installing a Kenwood KDC-BT318U receiver with antenna adapter and the item in question, the Metra 70-1784 harness adapter all purchased along with the removal tools from Crutchfield.

The instructions and some online reading has lead to a vague idea on how to actually connect the adapter to the receiver harness wires but there's the whole reverse the yellow & red wires and the connectivity of the blue & blue/white wires etc. for the power antenna. And what to do if anything, with that lower center code wire. I'm also "Ass-uming" the smaller of the two original connectors is left disconnected and none of it's wires are to be used?

Type receiver aside, what precisely is the connections process for this harness to the 95' E320, and are my "ass-umptions" above accurate?

Match color-to-color EXCEPT, like you say, switch the two power wires. You may do this by popping the connectors out of the Metra adapter so you wind up matched color-to-color, or just connect red to yellow and yellow to red.

Solid blue is the antenna wire on the headunit's harness. It should just connect to solid blue on the Metra adapter. Blue/white is amp turn-on. I don't remember off the top of my head whether the stock amp(s) need this turn-on signal (since my stock amps are sitting on a shelf somewhere) but if you get no sound, just connect blue/white to blue/white.

The code wire is left open, and the smaller harness is left open as well, as it's just all the wires for the telephone.

'95s are super straightforward, and you'll be rocking out in no time.

EDIT: As for actually doing the connections, solder and shrinkwrap is lovely, blue splice connectors with a GOOD set of crimpers works great too. I like to twist the two wires together, slip a splice connector over the twisted bundle, and then crimp the whole mess together. Half as many crimps to go wrong, and you wind up with a copper-to-copper connection.

Well that's exactly what I did and it works great. My only problem now (before the skeeters chased me inside) is fitting the new receiver into the existing non-modified slot.

The new Kenwood of course comes with a metal collar normally used in most cars to lock it in place except this one is not fitting thru/into the hole. I was at this point of the install and didn't really fuss with it too much before heading in plus wanted to be sure I am to use this collar or some other method.

So am I to use the metal collar, or no? If no how does it lock in? If yes I'm guessing I just have to finesse it a little more although it seems it would be a really tight fit.

You'll need to use the DIN cage. It's a biznatch to get it in there, but it can be done. I wound up pinching it a little at the top and bottom to suck in the sides a hair, and I managed to weasel it in.

Once slid in place, you'll bend whichever of the tabs on the cage are convenient for locking it in there. I've always just used a screwdriver to bend them, but whatever works.

PS - the amp does not need a signal as I learned today.