When should the transmission be serviced and is $225 a fair price for a fluid and filter change? I have a 99 CLK430 with 65K miles on it.

it's a fair price.

Thanks Robert. Any input on when this needs to be done? The mechanic made it sound like my transmision was going to fail at any moment unless I did the fluid/filter change imediately

It depends on how it was driven, if it was pushed hard then it should be done.Manufacturer claims that it should last 100k but that is considered driven normally like an old lady would drive.If you got yours used then you dont know how it was used before so I would service it asap.It takes synthetic fluid so it's a bit pricey about $10 a quart.