Stupid Transmission question.
 

I am still a little confused about which transmission our 1988 300TE has.
722.4.... or is it a 722.3?

Car has 69k on it now and the fluid color "looks" ok, but as we have no records we dont know when it was changed last.
Shift fine about 98% of the time, but I have noticed a slight slip on the change from 2 to 3 when cold.
Previous owner gave us a filter and gasket and said they had planned to do it.

What fluid should we use... MB only... a Synthetic like Mobil 1 ... or just a good quality normal fluid?

It's probably a .369 but if you really want to know go to the dealer and ask them to run VMI. Good idea to change it if you don't know the history. Dextron III should be fine.

dextron 111 is fine,don't forget to drain torque converter.while you're there tighten the modulator one turn to account for the slight slip.

I'm going to try this too. So tightening would be clockwise? Would this be one turn of the wrist or one full 360 degree turn?

360 degrees.

Here's a nitpicky but slightly relevant point: note that it's Dexron, not Dextron.