Here's a dumb question: Where is the oil filter located on the CLK 320? Is it the canister on the front part of the engine on top? And what's the best way to get it off? Should I use one of those strap wrenches used to unscrew a regular oil filter?

Yes the oil filter is where you described. It is covered with a black cap, there is a special socket offered by Hazet tools that will remove the cover. One can be purchased from any of your local tool dealers. (snap on, etc)