It's no secret that a BMW is a "Drivers" car. The focus is on the driving experience. For Mercedes, their focus is the luxury and comfort wether or not you see them that way. Coming from someone who owns a BMW and Mercedes (CLS63 AMG and S550 btw) I love both companies, but not all their cars. It really depends on what class of vehicle. For instance I love and bought an X5 and have absolutely no interest in the ML. When I bought my CLS at the time, I was also looking at a M5/M6 and ultimately decided on the CLS because its such a beautiful car while still on par with a M5 in terms of performance. With the S550 I did look at the 760iL and there really was no comparison. S550 was the better vehicle hands down.
Although I must admit I perfer the design of BMW interiors over MB almost all the time, I feel when it comes to comfort and quality of materials, MB comes out ahead if you're looking at anything above an E-class.

I think both companies make excellent cars, although MB has had lower standards between 1990-2003 but the quality is back. I think its great that MB is finally trying to refresh their brand into something more sporty, or more appealing for younger buyers. They are going in the right direction with the styling of the newer MB cars. BMW definitely has great engineering and technology built into their vehicles, but that is not to say that MB is not capable. It just isn't their focus.