http://en.wikipedia.org/wiki/Nikasil
Nikasil caused a lot of problems with BMW and Jag's back in the late 90's. MB never used it
AFAIK.
Now fast forward to 07, BMW uses some pretty neat stuff in their new engines. I think the blocks are magnesium, I would assume they would have to line the cylinders in some manner. Either through a coating, or as Mercedes did it with iron sleeves.