K&N filters are really not worth the hassle.
The biggest issue with them that I see, is that often, owners don't know how to properly oil them, and they are then over-oiled. This can negatively affect the MAF hot-wire on the E500E.
I have never (at least in E500E applications) seen any hard statistic that shows that K&N filters add any torque or horsepower to the car. Just go with the Mann or Hengst filters, or the factory MB filters, and change them every 15,000-20,000 files. I have usually done mine every 20K over the years.