1) Check for rust
2) Decide how seriously you take fuel consumption - my S320L can do as low as 10mpg (should be in the 20s). 500s are typically worse than 320s.
3) Decide on options - I've got the electric rear sunblind which is great as long as it works - mine works fine but they have a habit of going wrong. If the car has one, check it works. If not, you may think you will be happy without it but the temptation to get it fixed will always be there
4) Cloth or leather seats? Leather is fine - in the sun they can get very hot though (I have grey) and leather gives you the option of heated seats which are great in winter!
5) Check the vacuum pumps work. How? Test central locking with the keyfob, test the 'soft-closing' doors, test the interior boot open button, check a handle pops out of the back when you open the boot (if the car has that option), check if 'lumbar support' does its job (dial by seats at front changes hardness of seat or something like that, if the dial does nothing the pump needs replacing). I'm getting new pumps, they are ~£300 from Karl (w140.co.uk will be your friend if you get one)
6) If after reliability, you may prefer fewer electrics - otherwise, if everything is fine and the car is well looked after, go for one with lots. Mine has almost everything - just needs 2 new pumps and a rear headrest looking at (that is stuck up)
7) Resale value - W140s are on the whole better than their replacement for rust, reliability (mechanical) and things like that so hold their value better BUT poor fuel consumption means the 500s are worth little now as nobody wants a car so expensive to run
8) A bit of a generic issue but check the sunroof works fine - repairs on older Mercedes for sunroofs can be very costly
9) When looking at one car, check how much others of a similar spec are going for - your one may be overpriced
10) Options in general - think if you want heated seats, split rear seats (otherwise seat setting for one side affects the other side - both recline together if they aren't 'split'), dual zone climate control (front, rear separate), parking sensors (though I have a feeling they're standard), pre or post facelift (ones up to '93 or '94 (I think?) are pre-facelift and slightly different)
That's a very vague and disordered guide but it's a start. If you want, you can look at photos of my S320L in my album (click on my name to the left of this post and you'll see the link). It's a fantastic car - journeys never feel long and with the double glazed windows shut it just cruises along very quietly! I've owned Rolls Royces, an Aston Martin, Bentleys and many Mercedes and this is by far the most comfortable car I have ever driven - I mean that.
