Warranty people don't pay what repair centers charge. Plain and simple. Their database can be WAY out of date. But they are better than no warranty, especially with cars as unreliable as MLs. Things to ask about are :

deductables (can be high, and you have to pay on every visit for the same problem)
percentage of parts price covered. I would propose scenarios, such as compare what they'd pay for a new AC compressor or tranny, etc, and then ask the dealer
standard labor allocation: check their proposed labor vs dealer (e.g. is it 1 hr or 0.7 hours for a given task)
try calling their service number and pose as a repair center instead of a customer. sometimes they are REALLY slow.
service records: read the fine print on how your car has to be maintained and documented