I noticed that there are more standard equipment in the new models, which were all available only as options in the previous W203 model:
Std. in new W204 C300 (Options in W203 C280):
Glass Sunroof
Anti-Theft Alaram System
Bi-Xenon Headlamps with washers and cornering lights
Heated Front Seats
Leather covered steering wheel & shift knob
Split Folding Rear Seats
Std. in new W204 C300 (Not available in W203 C280:
Hill Start Assist
Neck-Pro Headrests
Tire Pressure Loss Warning System
Exterior Power Folding Mirrors
Bluetooth
Overall it appears that the W204 is a lot more competetive than the previous W203.
The new C-Class shouldn't have any problems in competing against the 3-series, A4 and the Lexus IS.
Johf