Most of the problems with my w126 (420SEL) have been minor, and predictable. Personally I would choose the SEL version. I've been in an SE, and if you care about the people you will be driving around, the extra 4-5 inches of rear leg room will show them you care. It is a big difference.

Personally I would go with a 420SEL. Better overall ride than a 560SEL, although not as much muscle, but more muscle than a 300.