I posted a thread awhile back on this subject, and there is a picture of the dial guage setup on the front rotor.
http://www.peachparts.com/shopforum/showthread.php?threadid=100590
If you read it, we got into some interesting math and correct use of the dial guage on the Mercedes. My shop manual does explain the how-to though and I stand by my procedure. I've had no bearing problems since setting them 2 years ago.