Mercedes cruising S-Class, NHTSA and Google
While there had been many rumous that Mercedes would introduce limited self-driving in the 2013 S-class, that was not to be, however, it seems plans for the 2014 S-class are much more firm. This car will feature "steering assist" which uses stereo cameras and radar to follow lanes and follow cars, along with standard ACC functions. Reportedly it will operate at very high speeds.
There's also a nice article on the Mercedes test facility. They are well known for their interesting test facilities, and this one uses an inflatable car being towed on a test track, making it safe to hit the car if there is a problem.
Media sources are also reporting that Google (disclaimer, they are a client) has hired Ron Medford, deputy director of the National Highway Transportation Safety Agency, which sets the vehicle safety standards and is currently researching how to certify self-driving cars.