I have a 2002 ML 270 CDI.
I get Just over 30 to the gallon - mixed driving (motorway and town). On the motorway it has hit 38mpg
Yes, they rust - I believe that 2004 onwards are glavanised steel - so, don't rust from 2004 onwards.
Mine has rusted on the rear arches, bonnet and boot - under the catch and in a few paint chips - however, I am having the lot sorted out for £300
Servicing - generally: £250 for a major serive and £120 for a minor service from a Merc independant. Gearbox ATF change £100 approx - New thermostat £60 - new MAF £60.
They are about the same price for most parts as a Ford Mondeo.
Brake disks and Pads are usually changed every year - it is a heavy vehicle and mine is an auto, so, we go through brakes very quickly - £70 for front disks.
Tyres - 255 x 60 x 17 - About £120 each - Pretty good on tyres for a big 4 x 4 - does not wear them too quickly.
Tax - £265 (I think)
Insurance for my wife and myself: £320 per year
Watch for: Rust, engine temp (should be above 80 deg on the disply, if not you will use loads of fuel and the thermostat needs replacing), MAF sensors tend to go (fuel usage will go up), rear Springs tend to break, also shows a hard life - check them as it is £275 for replacement spring and shock unit. Urm, some people have reported electrical issues, I have only had 1 relay go, ABS relay - £12 to replace
In terms of Frugal - Buy a Honda CRV 2.2 Diesel, but it will be more expensive to buy than an ML!
In terms of big useful cheap'ish vehicle - Buy an ML
I also have had a remap from 163 BHP to 210 BHP - saves allot of gearchanges and has made the car much better to drive - no difference in fuel usage, in fact it may be slightly better now.