FYI, the two synthetic oils that Mercedes has officially approved are Mobil-1 15W-50, and also the new 0W-40 (which is Mercedes factory fill now in all their cars). The other weights (0W-30, 5W-30, and 10W-30) are NOT approved!
Delvac-1 is only available in 5W-40 and is an even better oil, particularly for extended drain intervals (it suspends nearly double the soot of Mobil-1, I believe.) I use this stuff in my car but it is hard to find, and pricier too ($22/gallon usually).
I have heard of the 98-99 E300 getting up to 40mpg with a light foot, so you should definitely see 30+ (unless you live in CA and get that pesky Californicated fuel, which kills MPG by 10-15%.) You can also get a chip for this car which I hear bumps the power up to something like 210hp - incredible for a diesel!
The TDI's are nice too, fantastic MPG, but I have heard numerous horror stories about kwality issues with the VW chassis. The TDI engine itself is pretty decent but don't forget to change the timing belt. I feel the MB engine is much, much better but of course they cost DOUBLE what the VW does! There's an E300 turbo on eBay right now with a "buy it now" price of ~$22k... sure is tempting!
Oh - the 98-99 E300D turbo has an 80L fuel tank, which is roughly 21.5 gallons. So you should have a range of 600-750 miles or so per tank. With a 130 mile daily commute I'd expect 32-36mpg or so, depending on how heavy your foot is.
Regards,