A squeak from the steering column is often related to a rubber boot in the column or a seal in the power steering rack.Google+
Car Problem Reports
Mercedes-Benz E320 Squeak in Steering Column Due to Rubber Boot or Seal
Mercedes-Benz E320 Problem
Average Mileage: 111,946 mi (22,253 mi - 213,000 mi)
Visitor, 2001 Mercedes-Benz E320, 60,000 mi
Squeaking steering wheel.
Visitor, 2000 Mercedes-Benz E320
Squeaking sound and feel when turning the wheel. Wasn't fixed. Told the whole steering column would have to be removed.
Visitor, 2001 Mercedes-Benz E320, 121,000 mi
dry squeak sound when steering wheel is turned
Visitor, 2002 Mercedes-Benz E320, 93,420 mi
Squeaking sound when turning the steering wheel.
Visitor, 2001 Mercedes-Benz E320, 207,000 mi
steering wheel squeaks when turning in one direction or another.
Visitor, 2003 Mercedes-Benz E320, 150,000 mi
same as above
Visitor, 2000 Mercedes-Benz E320, 106,000 mi
Squeaky steering wheel just started and it sounds like plastic grinding together. Very loud noise.
Visitor, 2004 Mercedes-Benz E320, 133,000 mi
I hear a very loud obnoxious squeeking coming from my steering wheel / suspension whenever I turn or go over a bump. I just bought the car used and within a week this was happening. the sales guys must have known of a mickey mouse just long enough to sell in
Visitor, 2002 Mercedes-Benz E320, 69,000 mi
Its not fixed
Visitor, 2000 Mercedes-Benz E320, 170,000 mi
doesn't always have the rubbing sound usually when it's warm out.