For basic ABS, I believe the system does not rely on a steering angle sensor. The later ESP -type systems, however, which also try to correct for over or understeer, by braking separate wheels do, although this is really an add-on to ABS. ESP also makes use of solid-state gyros to detect where your car is going compared to where you want it to go, as read from the steering angle.
The basic ABS system relies on wheel sensors, whose function is to signal wheel speed to the control unit to allow it to detect when a wheel is about to lock up and hence release or modulate the brake pressure to it, to prevent skidding.
You'll need to check what type of system your car has. I think ESP may have been introduced around 1998, when the A-class met the moose.
There are many reasons which could cause the ABS light to come on, including airlocks, but the most common, I think, are failed wheel sensors.
As Arnie said if you vehicle is fitted with E.S.P then it could well be the S.A.S. If you don't trust your M.B dealer, ask for a copy of the fault report from the Star unit
Just to add my threepence worth. If the dealer has said its a steering angle sensor. It probably is. The star would of come up with a fault code relating to it. The steering angle sensor will put the ABS warning light on. Try turning the steering wheel from lock to lock with engine started. The dealership should of done this. This allows the relevant sensors to check and make sure the steering is in the correct place. Usually this would put the light straight off with any more checks. I have had this light come on when the battery has gone flat, or the car has been in an accident. In hind sight the common thing to them both would be the battery gone flat or been disconnected. Either way you have nothing to loose.
You could try another stearlership and see what they come up with.
Andy is right. If the battery is disconnected or flat (ie the system loses power, or a glitch etc), then the ABS/ESP light will come on as an indication to reset (recalibrate ) the steering sensor input by rotating the steering wheel fully from lock to lock. I think that this is also mentioned in most handbooks ( I remember reading it in one for an SL).
Anyway, the dealers should know about this. If you have doubts and they change the sensor, ask for the old one back, as proof.
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