Agree with Alon. Valet switch disable alarm, but still locks/unlocks doors (w/o chirp thoough). And yes, my LED will not pulse (blink) when I am in valet mode, but be a steady on.

Try pushing the switch (mine needs the key to be in position 1.. first detent) and see if you can get it working.

GOOD LUCK

__________________
2006 E350 w/ 155k miles (Daily Driver)

Previous:
1993 300E 3.2L Sedan w/ close to about 300k miles
2003 E500 Brilliant Silver (Had 217k miles when totalled!)
1989 300E with 289,000 miles (had for <1 yr while in HI)
03 CLK 500 cabrio (Mom's)
2006 C230k (Dad's)
1999 S420 (Mom's/Dad's)
2000 C230k Sport sedans
2001 CLK320 Cabrio (Mom's)
1995 C280 My First Mercedes-Benz... (155k miles. EXCEPTIONAL AUTOMOBILE. Was Very hard to let go of!)