You need a COMAND manual. You can download it here: Mercedes online manuals
COMAND is the Mercedes equivalent of iDrive, MMI, etc.. It stands for CO
agement and D
ata system: COMAND APS.
Download the 2008 E Class version, it's the same as the 2007. Do not download the 2009 version since it's the newest system and is a hard drive based system with a much improved navigation and voice control. And the 2010 version is for the W212 E Class (yours is a W211.)
The questions you're asking have detailed answers not easily explained in a post. Again, you need to sit down and read both the owner's manual and the COMAND manual. Also spend a Sunday on Google and you'll get all other questions answered.
The little "pod" is parktronic. There's one on the ceiling in the rear (look in your rearview mirror.) The "i" button is information for the subscription based telematics service (either TeleAid or MBrace; MBrace is the new "official" service that Mercedes contracts now.)
As Eric says, KG is keyless go.