It is all a matter of taste
Personal emotions and desires have to be considered when purchasing any new car. However, I will give you my evaluation. I have personally settled on the MB over the BMW, Audi, and Lexus. Now do I want a Blk C230WZ or C320C.
I have recently test driven a lot of cars in this catagory, including an A4 1.8, 325s, IS300, and C230c. From a performance stand point. They are comparable cars.
The car mags say the BMW handles the best, but it is subjective and you have to put the roads you drive in into the equation. The BMW clearly corners flatter, but the MB can be fixed with MB parts for about $200. IMO, the A4 with the sport package is clearly the best handling, but stiffest car.
I've driven the MB 2.3 and 1.8, BMW 2.5, and Audi 1.8. The MB 2.3 may be a little qicker than the 1.8, but the 1.8 is clearly much smoother and more refined IMO. the 1.8 doesn't even vibrate on cold startup. In my test drive, I thought it to be as smooth as the BMW 2.5. The Audi engine is much rougher and is much slower. According to the spec sheets, the 325 automatic is slower than the MB 1.8 (8.1 v.s. 7.5). The transmision of choice, manuals, are probable about equal. The fastest of this group is the IS300, but not by much.
The MB has more back seat room and is more versital with the seats folded. If you realy don't want a hatch, the C230 sedan is now available and if you want more SPEED, the C320 coup is available.