I did my water pump on my 560sel and it went smoothly with the help of Mclare's photo tutorial. You will find a water pump gasket sealer at any auto parts store specific to your job.
Take your time and remember to take of the crank pulley for that last water pump bolt. You also have to take off all the acessories to do the job (alt, power steering pump, etc.).
I stopped when the last bolt didn't come out and Mclare (by phone) was kind enough to explain to me that the crank pulley must come out to complete the job. It is a 4 hour job. I was impressed by the Mercedes belt tightening gears on all the belts, sure beats using a tire wrench!