This Baum iScan CS-2000 digital scanner will work on all Mercedes through model year 2002. It will connect via the 8-pin, 16-pin, or 38-pin diagnostic ports.
I have only used it on my W124 V8's (500E, E500, 400E, E420) with LH injection, so I can't comment on what it does with other models or injection systems. But with LH cars (including W140 and R129), it will communicate with all systems to read & clear codes. It supports digital communication with all modules capable of it (this is much faster than blink codes). You get live data (aka "actual values" or "data stream") from the LH, E-GAS, BM, and DM modules. For DI (EZL) and ABS/ASR, it will only read/clear codes (no live data). The live data from LH and E-GAS is extremely helpful for diagnosing engine problems, and since the E-GAS has multiple codes for each analog code (click here
- note there are six different digital codes which all appear as blink code "2"). The digital codes from E-GAS are much more useful than via a blink-code reader.
The kit includes a breakout box for the 38-pin port, so you can more easily use a handheld blink code reader when necessary for certain things... you'll still need the blinker box to check analog SRS codes on a W124, or to re-set the LH module adaptation back to mean values. Pretty much everything else can be done via the scanner directly. Trying to stick tiny 1mm pins into the 38-pin port and hoping you get the right socket is a PITA, the breakout box makes this a breeze with numbered 4mm sockets. The breakout box alone is ~$200 from MB, btw.
for a full batch of photos of almost all the menus/screens for the 500E.
Baum sells the same kit as a refurb unit on eBay for $595 with free shipping:
Mercedes CS2000 Fault Code Service Reset Scan Baum Tool - eBay (item 110622174843 end time Jan-07-11 06:23:31 PST)
, free shipping in USA (lower 48 only), PayPal is fine.