As far as my knowledge is concerned,Mercdes Benz is the Company name (Like Toyota is a company name) & the classes of cars are actually representing car's name (like toyota have corolla,corona,crown etc, merc have c,s,e,m etc)
now the classes
A : Hatch Back Cars
C : Small Sedan Cars
E : Medium Sedan Cars
S : Big Sedan Cars
M : SUVs
now in every class (A,C,E,S) there are three major variants, Kompressor, Elegance & AMG.
Elegance has got the minimum options
Kompressor has got all the luxurious options
AMG has got the sports kit installed as well with a couple of sports mods.
in S class there's another varient which adds an L, means the normal S class will be like : S500 but there's a more loaded version which is S500L (it is 6 inches longer than the normal S Class)
in the models before 1995 instead of S class the SE & SEL used to come (which is same as S class & SEL is 6 inches longer than SE)