Someone recently posted a thread regarding the purchase of a W124 ('87-'95) or W210 ('98-'03) wagon. I have owned both a 1994 and 1999 E320 wagon and posted this reply.

In terms of engine problems, the M112 is almost flawless; however, issues may develop if the owner neglects oil/filter maintenance. Oftentimes, nonsynthetic oil is used on computerized (FSS) maintenance intervals. Conventional oil is inadequate for the FSS recommendations, resulting in engine sludge and driveability problems. Mercedes was involved in class-action lawsuit for this issue and will cover all M112/M113 V6/V8 engines until 150,000 miles if damage occurs using conventional oil per the FSS system. I recommend changing FULL SYNTHETIC oil every 5-7K (primarily city driving) and 6-10K (primarily highway driving).

The 1999 wagon makes the 1994 feel like a Model A in my opinion. The car is significantly easier and more comfortable to drive. The steering as mentioned earlier has a better on-center feel, and the car absorbs bumps like they are not even there. The M112 V6 is probably the most refined V6 engine made to date...at red lights, new passengers in the car inquire if the engine is on!!! While not as involving to drive as the W124, this car certainly is the epitome of a highway cruiser. Additionally, the 4Matic AWD system has been great in the snow...better than my 5,890 lb. SUV. I will list some of the major problems I have had with the car from time of purchase (40K) until today (105K).
1. Front door switch (interfered with central locking and dome lights)
2. MAF (2X)
3. Oil quality sensor (2X)
4. Bellypan
5. Windshield washer reservoir pump
6. Rear axle center piece front seal leak
7. Harmonic balancer
8. CV joint boots
9. Control arm
10. AC compressor (with two days left on Starmark!)
The Starmark on this vehicle expired about four months ago...most of these repairs were covered by the extended warranty...would highly recommend it.

Hope this helps!