Just finished working on my 88 300E which had developed a low and erratic idle as well as loss in performance and barely passing emissions.
After many hours of checking every possible component problem was narrowed down to two components: The OVP relay and oxygen sensor. Mind you the car already had the upgraded style OVP relay with the two fuses on. Also, the check engine light was NOT illuminating and had no trouble codes for oxygen sensor. However, since the sensor had about 100,000 miles (maybe more) I thought of changing it anyway.
Since the new oxygen sensor was close to $200, I went for the generic Bosch 13953 sensor for $43.. This turned out to be absolutely identical to the stock one and with a soldering iron some heat shrinking tube and some good soldering skills I transferred the plug from the old sensor to the new one. I took the car for a drive and there was a significant and obvious gain in performance. I usually had to drive the car with the transmission in "3" because otherwise it would not move. After the sensor change, I had to check the shifter to make sure it was in "D". Huge transformation!!

However, this did not solve the low erratic idle (about 450-500rpm), but after checking the current going to Idle control valve and realizing that it was ZERO, I suspected OVP relay. Mind you, the ABS light which sometimes is associated with broken OVP relay was not on. Anyway, after removing the OVP relay at which point the ABS light DID come on, I checked the fuses and they were fine. I put it back on and banged it a couple of times and sure enough the Idle Control Valve started working. I called the dealer to get a quote for a new OVP and they quoted me about $100. So, I took the OVP on my bench and attempted to fix it. I opened it up and discovered TWO cold and broken solders on the little pc board. I fixed all of them put it back and voila! Idles like a charm!

Just thought of posting all this to help the bros here who may have similar problems.