Jim -
Having been a Jag afficianado for 50 years, here's my $. 02:
Get her an XJ8. Hands down the best of the bunch IMHO. Very powerful and sexy car. Women LOVE them. Personally, I wouldn't be caught in an X-Type - they just ain't true to the breed.
Save some bucks and get a late model pre-owned car. There are plenty of them around in the '99-'04 range and you'll save a TON of $$$. I'd start with a "reputable" Jaguar dealer and make sure you find a vehicle that has all the books and maintenance records since day one/brand new. And get a Carfax.
Last few years the Jags have surpassed just about everything according to JD Powers.
I've had both and found the Merc to be a good car but zip, zero, nada personality - no fun to drive. Dumped it in less than two years.
BTW - re: pronunciation, "Jaguar" does not rhyme with "quagmire". It's supposed to sound like "JAG-u-wer".
Here's a great place to snoop around:
http://www.jag-lovers.org/
Let me know if you have ANY questions about Jags. I sure don't have all the answers but I know where to find them and, as you can probably tell, I love to talk about Jags.