I had the same problem today and I was checking if anybody has mentioned any solution to this old thread. I was disspointed that nowhere people have mentioned the real fix. Anyway I have found the fix and as a courtesy to my fellow Merc owners I am posting it here.

The problem is with Windows Vista and 7 built in burner software. Mercedes Cd changer can recognise old Cd file system (CDFS) and not Universal Data Format (UDF).

Please download Nero 9 (Free) burner software so that you can burn CDs in CDFS format.
http://www.nero.com/eng/downloads-nero9-free.php

If you find this helpful please send a message to me .

Happy & Melodious Driving

-Opcode