OK, ill clear this up a bit by recommending what I think would be the best (reasonably speaking) exhaust for a W126 v8.
1. Euro tri-y manifolds, or at least the euro dual log style.
2. Dual pipes, No bigger the 2.5" pipe for the likes of a high output (220kw) 560, but in saying this from experience this is still too large for this engine.
So IDEALY 2.25" (for those wanting one pipe go 3")
3. A proper x-over pipe in the X pattern, let me say ive seen the ones on offer from Magnaflow and I dont like the stamped approach, get the fabricator to use two 120ish degree bends to make the x pipe .
4. The system will be mandrel bent, although this isnt a biggie.
5. Use a quality muffler i.e. Flowmaster 50 series, in the centre where the "kidneys" used to be, then follow with either another muffler or two bullet resonators at around 13" long.
6. For those with emission restraints get 2 high flow cat's preferably on the downpipes, there is appropriate heat sheilding there on the euros, dont know about the US spec cars.
7. Do whatever in terms of the tips but make sure they are away from the bumper being PVC and all.