My 1991 300CE had the jumpy fuel needle usually between 1/4 and 1/2 levels. After reading the forum it seemed that there was no definitive fix even for those that replaced the sending unit. I started to occasionally use Techron and also keep the tank more often in the 1/2 to full area instead of my previous 0-1/2 full area and the problem went away.

glenmore
1991 300CE
1990 LS400
2000 C280