Ok, I promised I would post back on this once I'd done my research and now here I am.
Why did I do this? My car keeps blowing the voltage regulator probably due to the heater blower. Yes, I need to fix the blower but it's winter and I don't have time for fixing both an alternator AND blower. I have an alternator with a lifetime warranty but after 2 alternators in 2 weeks(actually 5 alternators in 6 months), it got clear pretty quickly that it would be easier to change out a voltage regulator, especially if it were external. In parts this cost me all of $20-ish dollars.
I would love to give a long, detailed writeup but this article was what got me to working out what I needed to do and I wound up following his steps to the word with only a few modifications so I could revert back to a normal alternator at any time.
TurboBricks | High Performance Volvo Club
Really the only difference is that there is no "light" terminal on any of the alternators I had available(and I'm pretty sure they don't exist but as always YMMV) so you have to cut the wire that goes to the small terminal on the back of your alternator plug and use that for your "I" and "S" connections. I split the wire with a male/female connector set so that if I need to use a normal alternator, all I have to do is remove the external regulator's connectors and plug them into one another to complete the circuit as normal.
TADA!! I won't be blowing any more regulators that will require me to pull the whole damn alternator out to replace.
And when they say to bend back the metal tabs or else your battery light will stay on, that is NOT what happens in a Mercedes(I neglected to do this at first). Instead your battery discharges slowly through your alternator when your car is turned off, no light will show, Be sure to bend both of them back, the one on the scrapped regulator and the one inside the alternator; nothing major, just enough so they don't touch.
That's really all there is to it. It took me a week of planning and a couple days of experimentation to get it right but now anyone can convert to the super cheap external regulators since I know it actually works.