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S320 is a pointless car. If you're concerned about fuel economy, you probably can't afford to run a W220.
I have been lucky, it hasn't cost me all that much. I had a £1000 bill a while back for an AC problem, tyres are ludicrously expensive if you have decent wheels on it, Airmatic is RIDICULOUSLY expensive to fix and it WILL break. There are other things that can cost you a fortune - anything wrong with COMAND will be prohibitively expensive to fix, same as with the PSE system that controls the doors/boot/etc.
The V8 petrol is effortless in any form. You forget it is there. It is silent inside unless you're giving it death (and then that's not what the S-Class is for). The S320... isn't. That and the engine is just totally not at all suited to the car or the gearbox.
If you're going to get an S-Class, go in with your eyes WIDE open and GET THE PETROL.
The V8 isn't exactly the last word in reliability by the way - they are prone to sensor issues which will bring the car to a halt at the side of the road and require you to be rescued but essentially other than that, there isn't much to break. They are very old tech in there. The diesel is, I believe, a whole new ballpark of unreliability.
EDIT:
Fuel economy wise, I get about 13mpg on a short cold run, 16-19mpg on a slightly longer across-town run (speeds up to 40mph, 10-15 mile trips for example) and I've cracked 30mpg on the motorway once, usually get 27ish with the cruise set to "around 70".