I understand that ATF is not appropriate to replace power steering fluid in a 1996 E320. Viable fluid options include the Mercedes fluid and probably the Febi product. What's the skivvy on generic power steering fluids such as Prestone that is sold at finer Walmart stores.

That will work great. I use whatever power steering fluid is on the shelf at auto zone. It is far superior to ATF. The additive package of ATF has changed over the years and is not healthy for the seals in your power steering system. The PS fluid costs more than ATF, but is MUCH less expensive than replacing seals in your power steering system.

Good luck,