A 2004 has the 1.8L M271 engine. I would guess the seller assumes it is 2.3L because the car says "230" on its back side. Try googling "Mercedes m271 problems" and do some reading over at mbworld -they have a dedicated w203 forum. There seem to be quite a few timing chain failures around 100K miles.

The v6 engines deliver perhaps 20 city and 27 highway. Both the 2.6L and 3.2L give about the same fuel economy. The 2.6 is a short stroke variant of the larger engine, and I think that hurt its efficiency. Any v6 from 2001-2005 should be OK. After that the cars received the m272, which is the engine that had the balance shaft problems.

If you want trouble free, I would go for an early V6. The C240 has the smaller engine. It is a nice enough car, but also simple - manual seats, manual tilt and telescope on the steering wheel, mbtex upholstery.