What does the CS switch located near the shift knob do in a Mercedes Benz C240?

C= comfort, S= Sport

When your in C (comfort mode) the car drives like a regular luxury car. The suspension is soft, and the transmission shifts at lower rpm's, so your not revving high, basically use this mode for regular driving, it feels the best for day to day driving and will give you the best fuel economy.

S (Sport mode) is for when you want to have a little fun. The suspension will tighten up and become noticeably stiffer, and the car will accelerate into higher rpms before shifting. So you got a sport like feel, the car revs high in every gear and down shifts rather quickly as well. This mode drastically reduces your gas mileage though!