I just did this on my 2000 E430. I once owned a 2001 E320 and the engine is similarly situated.
>A good code reader costs about $80 to $100. If you have a friend that has one and will lend it to you, use it. Code readers are universal for any modern car. The readers will come with a book that help you interpret the codes.
>The code reader plugs in right under the dash on the drivers side. There is a little door that flips open. Read the instructions for the reader... its pretty simple.... most are: 1) plug in, 2) turn the key on but don't start the car, 3) read the codes / page through the codes.
>If its O2 / Oxygen Sensor / the codes will point to Bank 1 or Bank 2 / Sensor 1 or Sensor 2.
>Bank 1 is the bank on which cylinder 1 lives. If you look at the head, you will see the cylinders numbered. On my E430, cylinder one (and thus bank 1) is on the right / passenger side.
>Sensor 1 on both banks is before the catalytic converter. Sensor 2 is behind the converter.
>If you have a check engine light for one sensor it is a best practice to replace all of them - or at least in pairs of front at the same time or rear at the same time.
>The rear / # 2 sensors are extremely easy to get to. I replaced both in about 10 minutes. I pulled the car up on ramps and these are easy to find. Its a unit with a wire - its screwed into either exhaust pipe. The wire is blue with a plug on the end. Just unscrew the old sensor and screw in the new one. I used a wrench - even though I bought an O2 sensor socket, the wrench was easier. I checked torque using a claw foot and I torqued them to 30 ft. lbs.
>The place to buy the sensors is www.autohausaz.com
They supply the real-deal, Bosch sensors that are OE at 1/2 the price of buying them from your MBZ dealer. I paid about $85 each for two rear sensors. Shipping was free and they delivered super fast. Be careful to buy the proper sensors for each bank and front or rear.
>My front sensors were not causing a fault. They looked hard to get to so I (stupidly) did not buy front sensors from AutohausAZ and did not intend on replacing them. However, I replaced my spark plugs. When I had all the coils off and all the boots removed, the front oxygen sensors on both sides were staring at me right through the gap between the firewall and the rear corners of the engine. >They are easy to see... screwed into the exhaust, blue wire running from them and plugged in near the top of the engine.
>With the front Oxygen sensors staring at me - and not wanting to go through dis-assembling the coils and spark plug boots again for at least another 5 years - I went to my local Benz dealer and bought the front sensors. These were list of $188 each. I got a little break at $160 each... about twice what I would have paid at AutohausAZ. However, it was worth it to me to get it done and not wait 3 days to have them delivered.
>To remove the front sensors I used a 7/8" claw foot on the end of a long socket extension. I had the claw foot, a 3" extension, a U-joint, then a 9" extension and maybe another 3". Both sides, it was very easy to maneuver the claw foot into place around the hex on the sensor. A quick twist loosened it. Both sides, I was able to reach it with my hand and back it out the rest of the way. (remember... all the coils, wires and spark plug boots were removed.)
>The new sensors have anti-seize already on the threads. I started the sensor by hand and then tightened it lightly with the ratchet. I switched to the torque wrench and torqued them each to about 30 ft. lbs.
>Voila! Done. I'm glad I did this while I had the space. Getting to the front sensors with the spark plug boots in the way would be a hassle - but probably not impossible. I'm glad I won't have to find out.
>The spark plug job is another story. It was a lot of work - but worth it. Plugs are under $8 from AutohausAZ vs. $~15 from dealers. And its a labor intensive job that I know by doing it myself its done properly.