Hi, portman, welcome to the forum.
When you have a second, please complete your user profile to include your car and locale, that can be quite useful.
Also, you've posted in the general forum, if you scroll down you'll find that there is a forum specific to your car, the W210 forum. Posting in there for questions about your particular car typically yields much more useful information.
The E320 V6 has four oxygen sensors, two on each bank. Typically when the CEL comes on and the codes are read, there are actually four different codes for the front and rear sensors on each bank. The complete set of four is about $420 at discounted online prices, so they're not exactly cheap anyway (that's a small fortune to me, even without labor to install them). If you purchase a tool (oxygen sensor socket) and do it when it's cool they are not that difficult and you can buy them at places such as Auto Parts at AutohausAZ - OEM Auto Parts - Discount Replacement Parts, Resources and Car Care Tips
Assuming your mechanic didn't misread the code, then he is probably right. If the light had come on and you (ahem) ignored it for long enough, that could be enough to damage the other sensor on that bank. On the other hand some folks say they're only good for about 75,000 miles anyways. The real question is whether you trust him, if so and you don't want to bother with it yourself, have him change it.
Take care and enjoy the ride,