I recently purchased a 2000 E320 that had only a single key. I would like to purchase a second key for my wife. Is the dealer the only source for this? (They wanted $215 for a key)

 

MB is the only source, for they key, (I would check another dealer for prices) and forget any idea of the Ebay crap. They are good for housings only, MB keeps the data base, there is a maximum of 24 keys for any car and if not properly ordered it will erase your other key forever. They can either read your existing key and see which one to replace but I would strongly encourage ordering a "additional" key. In my case someone screwed up and the replacement removed my good one forever, The key will luck and unlock out of the box, but needs to communicate with the car for up to 45 minutes before it registers. The doors are infrared, the ignition lock is inductive energy.
I assume you have a "Smart -Key" remote that fits into a slot, and no physical key except the emergency for the door and trunk. They also had an emergency key for the ignition which looked like a very narrow remote, no functions.