I am in the middle of installing this HU in my 2003 C320. We have been taking it slow so we don't break anything but here is what I am tell you so far.
If you have the Bose fiber system it is a pain in the butt to get everything installed. I needed an amp (Polk Audio 5 channel), the Pioneer Carpi system to get my steering wheel controllers (you can get the VSS signal without it but the Carpi makes it easier). All of the speakers needed to be replaced (Polk MM6501's sound really good) and all of the interior trim needed to be removed.
Running the wires through the door wasn't that bad as long as you take your time, unhook the rubber piece between the door and the body and get a couple of metal coat hangers wrapped in tape.
If you take your time and read up on everything you can do the install yourself but be prepared to spend a good 30+ hours doing it right. The MBworld.com forums have a lot of info.
Get the CARPI that fits your car and the back up light, VSS and Illumi wire are right there off of the CAN bus. Mine cost 150 USD and I had to order it overseas since Pioneer doesn't sell them in the US (bastards!).
As for the OEM mic, there is a post on the MBworld forums that talks about how to take your old one out and replace it with the Pioneer one. You need to take them both apart but you can use the MB housing to keep the factory look. The mirror (as well as just about everything else) just pulls off with some force. Use a screwdriver to apply pressure on the metal retaining pin when putting it back in.