Thought I'd add my thoughts...
As you many have indicated, the Japense brands will be more reliable (Lexus, Infiniti, Acura), but for the big flagship models, their offerings do not inspire passion.
If you want a big flagship car that will turn heads, I agree with your choice between BMW 7 and MB S.
Between the two, in the years you're considering, I think the BMW is generally considered more reliable. There aren't a lot of these cars out to for data, but I have last year's Consumer's Report 2003 car guide with reliabilitly histories, and the BMW 7 series (only 1998 had average reliability, and 2001 had above average reliability -- these where the only two years with sufficient data), while the MB S-Class was rated below average in reliability for the 2000 model year (insufficent data for other years).
The choice between BMW and MB is very personal, but I felt the BMW is more of a driver's car. I don't like the newest generation 7 series, but the 1998-2001 7 series is a beautiful car.
That's why I got a 1999 BMW 740 Sport Package, cosmos black with tan interior [and of course Zaino!] (and the wife's car is a 2004 Infiniti G35 Sedan 6mt).
I would highly recommend going with 1999-2001, and getting the sport package. If you go for a 740iL, the sport package is only cosmetic (black-out trim, beautiful M-rims), but for the regular length 740i, the sport package includes suspension, and different gearing (making the car very fast, but even more of a gas guzzler). The difference in looks between a sport package and non-sport package is huge, IMO.
Good luck with your choice.