Nothing wrong with Jags! ...and it sounds like Gibbo has found himself a hell of a good deal. I've never seen an S-Type that cheap that was worth buying.
The 3 litre six pot Jag is thirsty for what it is though and it doesn't seem to make any real difference weather you have a manual or an auto the fuel economy stays about the same. I never got mine beyond 31mpg on a long motorway trip ....typical combined was about 23mpg ...with a 6 speed autobox. However the S-Type is actually a bit worse than the XJ typically as it's heavier, being made of steel rather than aluminium. Having bought the manual you wont have any of the issues that you can get with the autos of course, which are the main source of large cost faults on these as they get older, also the older Jag autos are very, very lazy and really require some persuasion to get them to really kickdown and go.