Hi,
I've got a little experience on this as I currently own a 996 C2S Cab. I know everyone goes on about the 993 and I'm sure it's a brilliant car, but the 996 is much more of an everyday car and can handle high mileage much better. Also, the cost of running a 996 is much cheaper than a 993 since it's much easier to service. Apart from the exceptions, a 996 should be pretty much bullit proof as long as it has been looked after. Don't go trashing until the engine has warmed up for example. Service it on the dot with the right parts, engine oil, etc...
There are many specialist that can service these cars for much less than Porsche and often they are far more knowledgeable about the cars.
As for which 996, will you believe when I set out to buy one I wanted a manual coupe, but after test driving a several ended up buying a tiptronic convertible. This is really down to personal choice, but the tiptronic is amongst the best I've used, since it's really a fully automatic gearbox with exceptionally fast gear changes, much better than the true semi-automatics since they never seem to work properly in the real world. Since I live in London when I'm in the UK, the tiptronic in fully automatic mode makes so much sense. Also, when you are really on it, when in full tiptronic mode, it can be a real hoot throwing the car around. I suggest you try one of each and see what you prefer.
The reason I went for a convertible was simply when I drove one, I didn't really get a feeling that I was loosing much dynamically. Also, the sensation of driving fast through country roads with the wind in your hair just hightens the experience. It was just so much fun! Talking of fun, I'd really recommend you go for a C2 and not a C4. With all things being equal, it's likely that the C4 would be faster on a wet road, but even then the chap in the C2 will be having more fun!!!
My last advice is that you really need to try quite a few cars and take your time. I experienced a lot of difference between cars that were supposed to be identical. Porsches are very sensitive to the tracking being setup properly. This is best done by a independant specialist, since they can setup the car to your taste.
My car is a 2000 model car which I've now owned for 2 years. This is the 3.4 litre engine. I have tried the later 3.6 litre engine and to be honest I didn't notice a huge amount of difference. Again, it is more to do with how well the car has been looked after.
If you buy one, especially after driving a Mercedes, you'll absolutely love it. This is not putting down Mercs, it's just that a Porsche feels alive when you are driving it! It's just so much fun, something even a die hard Merc enthusiast must admit is not a Merc strong point.