I'll echo the advice already given, and can vouch for the link to the German website given in post 3. If you're going for mint, I wouldn't bother with one without FSH if only for peace of mind. Leather in an S class I feel is a must. Exhausts are pricey.
Look out for wear on the driver's seat bolster; it's a good indication as to general condition and whether it's been looked after.
The odometer numbers should line-up, if not, it's likely to have been clocked. These cars were built to last and wear their mileage well.
Check the jacking points for corrosion by pulling-off the dust covers. Originals were painted in body colour here and should be clean- undercoat/mastik/hammerite/red-oxide here means it's been repaired/bodged.
Check the steering lock to lock and listen for rumbles and creaking while in motion, could be ball joints (cheap) or power steering pump (not cheap).
Wheel arch lips front and rear; check for bubbles. Enthusiasts keep these clean; bench test is to feel under the lip for accumulated debris.
Check the join between the lower body cladding and the body - bubbles can start here too.
I might get lambasted for this, but the mint ones I've seen have clear rear reversing lenses. Cloudy ones tend not to be, but again, is just an indication of what to look for.
Also check for original wheels. I've seen ads where w124 wheels have been substitued on w126 cars. They are 15 hole flat fronted alloys, and the holes are ovaloid, not rectangular (check previous poster's pics). 8-hole alloys were an option.
Check for milkiness on the corners of the rear screen, another sign of possible water ingress.
Good luck with the hunt, and also get an inspection done by an expert on the model.
I'd consider the mercland car, it does look very tempting!
I can point you to this thread:
http://www.mbclub.co.uk/forums/spotted-ebay/70164-28k-miles-1991-500se.html though the car is now not on the dealer's website, some more info on asking prices.