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Over the past few months we have been able to test two S500 Mercedes-Benz sedans: the standard S500 and the S500 4Matic with all-wheel drive. The first came our way in the fall of 2003. The second one was tested in the late-summer of 2004.

Mercedes bills the S-Class as the finest luxury car in the world. (Never mind that they're now building an even more expensive Maybach sedan that is also supposed to be the finest luxury car in the world.) Suffice it to say that for many millions of American car buyers the S-Class is, indeed, the pinnacle.

The S-Class enters the 2004 model year with an all-new standard automatic seven-speed transmission, a standard DVD navigation system, MP3 play capability, and optional five-spoke 18-inch wheels. The next big step in occupant safety, called PRE-SAFE, continues to be offered on the S-Class. This system – which has already won numerous awards as a forward-thinking safety concept – can actually configure the seats, seat belts and even the sunroof to best protect occupants in the event of an unavoidable impact. Every S-Class model also comes standard with a tire pressure monitoring system.

The S430 sedan uses a 275-horsepower, 4.3-liter V8, while the S500 — the model we tested — has a 302-horsepower, 5.0-liter V8. Both S430 and S500 come fully equipped with an air suspension system, GPS navigation, the Tele Aid telematics system, leather upholstery, 12-speaker Bose surround sound audio system with active volume and frequency equalization, ESP stability program and sunroof.

The S430 and S500 sedans can be equipped with the 4MATIC all-wheel-drive system. Mercedes' 4MATIC is a full-time all-wheel-drive system that uses a 40/60 front/rear torque split through a planetary center differential and requires no driver intervention. Advanced four-wheel electronic traction control is used to vary torque distribution to individual wheels under slippery conditions. Even if three wheels lose traction, 4MATIC can direct power to just one wheel, front or back, left or right, to keep the car moving. The system is lightweight (under 200 pounds) and compact, so passenger and cargo spaces are not affected.

The S430 and S500 are two of several new Mercedes models to feature the world's first seven-speed automatic transmission for passenger cars. The new transmission improves acceleration performance and enhances fuel efficiency compared to the five-speed automatic previously used. Gear changes are barely noticeable, especially in the higher gears.

The new seven-speed transmission improves acceleration from 0 to 100 km/h (62 mph) by up to 0.3 seconds and allows significantly quicker acceleration for highway passing situations. At the same time, shifting is even smoother than with the previous five-speed.

Using seven gear ratios allows the automatic transmission to retain the small increases in engine speed that are important in ensuring optimum gear ratios, while at the same time offering a larger ratio spread between the lowest and highest gear. The electronic control has more flexibility to adjust shifting to achieve optimal fuel efficiency. The seven-speed transmission also lowers average engine speed — a clear plus in terms of both reducing fuel consumption and minimizing noise.

When the driver shifts down rapidly through the gears (kickdown), the new seven-speed transmission does not always select the individual gears in strict order. Instead, the new transmission will skip a particular gear if necessary, switching from seventh gear straight down to fifth, for example, and from there directly to third. In this instance, only two gear changes are required – rather than the normal four.

The S-Class chassis uses a fully independent four-link front suspension and Mercedes-Benz' patented five-link rear suspension. Most importantly, it uses two innovative types of springing and damping systems. Standard on the S55 AMG and S600 sedans (and optional on both S430 and S500), ABC active suspension is the revolutionary system first debuted on the 2000 CL500. After 20 years of research and development with several different prototype systems, ABC active suspension virtually eliminates body roll in cornering, squat under acceleration, and dive during braking.

Mercedes-Benz engineers use ABC's interplay of hydraulic, electronic and mechanical parts to reduce body roll by 68 percent (compared to a conventional suspension with full-range springs, shock and stabilizer bars). A 'Sport' switch on the dash can alter this, to 95 percent-reduced roll, if the driver prefers sportier handling. Active suspension solves the age-old tradeoff between ride comfort and handling precision. The S55 AMG and S600 with ABC have the sumptuous ride comfort of an S-Class sedan with Airmatic air suspension, while gaining crisp handling that surpasses most high-performance sports cars.

ABC active suspension system uses four hydraulic servos, one on top of each steel coil spring. Located between the body and the springs, these pistons apply additional forces in response to split-second signals from the ABC computers. As a result, the servos actually regulate the action of the springs in relation to incipient body movement.

Airmatic air suspension (standard in S430 and S500) uses the same multi-link front and rear suspension arms, but uses compressed air in a bellows-type spring to maintain constant ride height in front and rear regardless of load. Supplying and releasing compressed air with split-second quickness at each of the four bellows balances varying load conditions. At speed on the highway, Airmatic automatically lowers the car by roughly an inch, helping to reduce drag and increase aerodynamic efficiency, and therefore, fuel efficiency.

Airmatic also incorporates the Mercedes-Benz adaptive damping system, which actively adjusts the shock absorbers according to road conditions, load and speed.

The overall design theme of the S-Class interior conveys luxurious warmth, from its standard leather upholstery and wood trim to the way the instrument panel flows into the door panels. It also receives a number of changes and updates, including a DVD navigation system, optional cardless Keyless Go and a COMAND

(Cockpit Management System) system with MP3 play capability. Although the focus is on function and comfort, the design is meant to please the eyes, too.

The S-Class seats offer 14-way adjustment, plus an innovative head restraint design that can function as a pillow for maximum comfort.

The S-Class 12-speaker Bose surround sound audio system deftly creates excellent sound staging for a passenger vehicle. Digital signal processing allows the driver to select different presets to optimize audio programming for the number of occupants onboard and the listening program. From a driver in the car alone, listening to talk radio, to a car full of people, listening to symphonic or vocal music, there is an audio setting to make the listening experience more enjoyable.

Our first test vehicle was a gray S500 and we took a little road trip with it, from Baltimore to North Carolina and back. This sound system was very good — when it worked. Unfortunately, that only occurred intermittently. The CD mode crapped out almost immediately after we took delivery of the car. The AM/FM radio mode functioned sometimes. Call us old fashioned, but when the sticker on a car approaches ninety grand we expect everything to work. We might have been more tolerant of this problem had it not been the second Mercedes test vehicle in a row that had really serious electrical problems. (See our CLK320 review for more.)

We both thought there was too much engine noise coming into the cabin, as well. Possibly part of this was due to the fact that we weren't able to listen to the sound system, but not entirely. It was just a noisy engine, and that surprised us because previous Mercedes engines have been much quieter.

On the plus side, it was a solid driving car. It was extremely comfortable and two adults were able to spend ten-and-a-half hours in it on one stretch and still emerge fit at the end. The gas mileage isn't anything to brag about for a car with a 5-liter V8 (16 city, 21 highway), but the performance was excellent in every respect.

Given that experience, we were quite anxious to test the S500 4Matic that was scheduled to come our way a few months later. And I'm pleased to report it turned out to be everything we expect in an S-Class Mercedes: perfect in every way, a quiet and powerful engine up front, and, overall, a car that was a real pleasure to drive. It even got better gas mileage than the S500 — 22 on the highway loop, up one mile per gallon. In fact, every Mercedes-Benz car we've driven since that troubled pair last fall has been flawless. In addition to the S500 4Matic, that list includes a C230 coupe, a pair of E500s and an E320 CDI diesel. No problems of any kind with any of them.

So, what was the deal with the cars last fall? Part of the problem, no doubt, is that Mercedes these days really is pushing hard at the technological envelope. On the one hand, that's a strength; leading-edge technology constitues a major part of the definition of what a Mercedes-Benz is today. Yet, to try something new is to risk failure. And the harder they push, the greater the risk. That the company does as well as it does — and it does very well, indeed — must be considered quite an achievement. R&D