I have a lot of experiance with Jags, and mixed feelings about them. From what I know a 1997 XJ6 is the way to go if you want a cheap reliable driver.
1998-1999 XJ8's had iffy V8's and the upper timing chain's tend to snap. These need attention like every 80k miles. If you want an XJ8 buy a 2000 and up model.
I was cross shopping a Jag and MB when I was looking to get a newer car and frankly you can get a lot of Jag for the money and the new ones are pretty reliable. But parts cost tons more then MB's, for example if you get stuck with the Brembo brake option rotors are $300+ each.
Jag parts prices will make your eyes water. Also Jag has never had the R&D money that MB has, I don't think engineering wise and fit and finish wise they are on the same level. MB is slightly better in that regard. For example if you look in the fender wells and how the rear window is put in on say a 98 XJ8 some of that stuff seems kind of cheesy. Compare to a 1998 S420, and well MB is a notch up. Interior wise Jag is ahead.
I know MB's better and am comfortable with them so I would pick a W140 over one. MB parts are pretty cheap and they are pretty simple to fix when they break. However I wouldn't turn a nice Jag down.
I cross shoped clean late 90's XJ8's against the same W140's. In my book the W140 is a better car. People have an irrational fear of them for some reason.
http://forums.jag-lovers.org/index.php3