the Mercedes-Benz C-Class has become a legitimate contender after years of also-ran status. We weren’t big fans of the previous-generation model, as we found it overpriced considering its lackluster interior, performance and quality. Things changed dramatically last year, however, with a complete redesign that brought about a renewed emphasis on the traits that Mercedes is traditionally known for, as well as an extra dollop of sportiness to compete with its German rivals.

Although the car’s dimensions, suspension design and V6 engines largely carried over from the previous generation, the new Mercedes-Benz C-Class gained an improved interior with higher-quality materials, an optional hard-drive-based navigation and multimedia system, and an easier-to-use COMAND interface. The Luxury and Sport trim levels were also clearly differentiated in terms of styling, suspension tuning and interior design. Midway through the model year, Mercedes released the long-awaited, all-new C63 AMG. The performance-oriented sedan came loaded with a 6.2-liter V8 cranking out a thundering 451 horsepower and 443 pound-feet of torque.

This year, Mercedes further distinguishes its Luxury models from the Sport models; the latter get a sport-inspired instrument cluster, which is a logical addition to the Sport’s already distinctive interior, and more aggressive exterior styling. On the safety front, all 2009 Mercedes-Benz C-Class models get seat-mounted front pelvic airbags. For music buffs, the optional hard-drive-based navigation system’s larger size (40GB) now has 6GB reserved for music.

With its mix of driving involvement, comfort and high-tech goodies, the 2009 Mercedes-Benz C-Class is a fine choice for an entry-luxury sedan. However, the V6-powered models are up against stiff competition from the Audi A4, BMW 3 Series, Cadillac CTS, Infiniti G35 and Lexus IS. Here, the C-Class holds advantages in terms of its top-notch build quality and distinct models, but is let down by its comparatively less powerful engines and typically higher price. The C63 AMG is a different animal, though — with all that power and torque, it gives the Audi RS4, Lexus IS-F and the vaunted M3 a serious run for their money.

All 2009 C300 models are powered by a 3.0-liter V6 that produces 228 hp and 221 lb-ft of torque. A seven-speed automatic is standard on the C300 Luxury and optional on the C300 Sport, which comes standard with a six-speed manual. Mercedes estimates a 0-60-mph time of around 7 seconds. All C-Class models are rear-wheel drive except for the C300 4Matics, which are all-wheel drive.

The C350 Sport is powered by a 3.5-liter V6 that makes 268 hp and 258 lb-ft of torque. The seven-speed automatic is the only transmission choice. In track testing, we clocked the C350 from zero to 60 mph in 6.2 seconds, which is quick on its own merits but unremarkable compared to the BMW 335i and Infiniti G35. Mercedes estimates C350 fuel economy to be 17 mpg city/25 mpg highway and 20 mpg combined. A rear-drive C300 with an automatic transmission has a rather unimpressive 18/25/21 mpg rating.

The rear-wheel-drive C63 AMG is powered by a 6.2-liter V8 that pumps out 451 hp and 443 lb-ft of torque. It’s paired with a seven-speed automatic transmission that allows the driver to choose from three different shift modes that adjust shift speeds for comfort, sporty or high-performance driving styles. In our tests, the C63 AMG was able to rip from zero to 60 mph in just 4.4 seconds. Fuel economy ratings are 12 mpg city/19 mpg highway and 15 mpg combined.

The C-Class comes with a full load of standard safety equipment, including front side airbags, full-length side curtain airbags, front seat-mounted pelvic airbags, active front head restraints, stability control, traction control and adaptive antilock brakes that feature brake assist, brake drying, pre-pressure and hill-start assist. In government testing, the 2009 Mercedes-Benz C-Class received four stars (out of a possible five) for both driver and passenger in frontal impacts, and five stars for front and rear passengers in side impact collisions.

In a straight line, the 2009 Mercedes-Benz C300 and C350 won’t set any records. But steering and handling are precise, and in terms of overall dynamics, the car measures up just fine compared to others in this segment. Despite its somewhat sporty character, the C-Class is never harsh on the road, and it can tackle long road trips with ease. The C300 Luxury rides a little softer than the Sport versions and has a quieter exhaust system, resulting in a more serene driving environment, though naturally this model doesn’t handle quite as well.

The C63 AMG, on the other hand, is built first and foremost with performance in mind. With torque peaking at 442 lb-ft at 5,000 rpm, acceleration is effortless, regardless of speed. The C63 feels much more fluid and better balanced than its predecessor, the C55. It responds to driver inputs with added sharpness and a degree of communication few other regular production Mercedes-Benz models offer. But while the C63’s ride is firm, it rarely seems too harsh or noisy, even on poor pavement. It’s quite possible that the 2009 Mercedes Benz C63 AMG could be an M3 killer — as long as you’re cool with an automatic.

It’s beautifully crafted, but the C-Class cabin can come off as austere and a bit bland — although the AMG version packs quite a bit more punch. When equipped with the Multimedia Package, the C-Class is transformed into a mobile sound studio and movie theater. For 2009, the built-in hard drive’s storage capacity has increased, leaving 6GB of space for music (about 1,500 songs). With the car in Park, the system can also play DVDs through the pop-up LCD screen and superb Logic 7 surround-sound system.

On the downside, even though the latest generation boasts more spacious dimensions, the C-Class is still on the small side for its class. Trunk capacity is 12.4 cubic feet, which can be expanded on models equipped with split-folding rear seats.