[jtheodore]

I had a 2005 C230K with 6-speed manual previous to getting a 2008 C350 (+P2+Multimedia+Leather+iPod) last week.

The differences are:

Mileage:
C230K: I got 28mpg (combined hwy+city) over 3-years, 36K miles. I used to consistently get 34-35 mpg on highways. My best was 39.7 mpg over a 110 mile trip in So. Cal. This car gave awesome mileage - too bad MB stopped selling this here in the US.
C350: My first week mileage so far is 18mpg, after 220 miles of combined use.

Looks & comfort:
I think each car looks good, for its time period

Steering:
The C350 steering feels very light. I prefered the stiffer steering on the C230K manual. I noticed that the C230K autos did not feel that stiff, for the same model year

Finish:
Both are plasticky - the steering wheel on the C350 looks cheap, whereas the dials and 7" screen are nicer

Tires:
My C350 came with Continentals - crappy compared to the Michelin Pilot Primacy that came with the C230K

Handling:
C230K felt lighter and more nimble. The C350 feels heavier - more of a touring car, rather than a sporty one.

The C350 Harmon Kardon system was a huge disappointment - compared to the Mark Levinson that I have in my other car (a Lexus GS). It does not sound like a premium sound system - specs don't mean anything if the sound repro is this bad.

That said, I like my C350 for its refinement, design styling (always subjective) and hi-techiness.