I have a 1995 E300D which has the same engine (OM606) as the 1996 model except with the older body style (w124). The 1996 models are the 210 body style.
Watch out for the glow plugs! With the OM606 engine carbon builds up on the glow plugs which means they can get stuck in the head. My shop was able to remove 5/6 glow plugs but then the 6th plug got stuck. Had to pull the head (and send it to a machine shop) to fix it correctly. Lots of labor involved $$$
But other than that it's been a great car. I get 32-37mpg consistently. I have 173K miles on my car.
One other thing about 1996-2000 210 Mercedes....occassionally the front spring perches rust out....big problem. There's more about these cars at:
http://www.mercedesshop.com/shopforum/forumdisplay.php?f=15
Here's a picture of my car's engine bay during the glow plug fiasco.
