For the past few years, I have helped many enthusiasts and repair shops, with the Start Error Issue, All Keys Lost / Add a Key, SKREEM issues, ECU issues, RCM issues. In this thread, I will try to explain how Crossfire (and SLK Mercedes) Immobilizer system works and will address the issues I often see.
While I noticed a great publication with high resolution images regarding repairs of the RCM (NOT THE RUBBER BAND METHOD) I will try to refer to that thread, focusing on the immobilizer.

Definitions of involved parts:
Prior to any retrofit, each key has a transponder chip and a transmitter. Those are separate parts! Transmitter is that little board, which you can see when you open the battery door. Transponder is an internal part, not connected to anything and is a black little thing positioned such as to bring it as close to the ignition as possible, when the key is inserted.
SKREEM, this is the name used for immobilizer box, black plastic box, located behind the instrument cluster of your vehicle, with 3 sets of wires going to it.
ECU - Engine computer, it is a metal box, located next to the battery of the vehicle, inside of that plastic electrical box and immediately next to RCM module.
How does the immobilizer system work:
When the key is inserted into the ignition, SKREEM using the black plastic ring surrounding ignition and connected directly with it by a black wire creates magnetic field, which electrifies the chip inside of that key. Chip transmits its ID, which is recognized by the SKREEM.
SKREEM compares the ID of the key to the list of known keys. There are up to 8 keys, which may simultaneously be redistricted with one SKREEM. If the ID matches to the one stored in within the SKREEM, it renews the key by writing a new ID to the chip, and stores the same ID for the subsequent start. Each ID has a corresponding hash, another code. Upon recognizing the ID of the key, SKREEM sends the corresponding hash code to the ECU.
ECU receives the hash code from SKREEM and compares it to the one stored in it to the one stored therein. The procedure of matching the ID of the key to the one within the SKREEM and hash code between ECU and SKREEM is known as "drive authorization". In other words, when those IDs and has codes match - drive is authorized and the motor starts.
Locking Unlocking function:
When a button is pressed on a working key, the board transmits a radio signal, which is detected by the SKREEM. It is like a music which is transmitted by tower and received by your radio. SKREEM is looking for a specific transmission, such if you would be waiting to hear a specific song. Once it hears the signal, stored in it as "open door locks" command - it activates locks and doors are opened.
Chip transmission v. Locking/Unlocking transmission:
Ignoring the strength differences, the transmission from the chip, while is different from transmission from the remote, have similarities. Certain calculations permit a calculation of the acceptable chip based on the signal received from the locking/unlocking mechanism and vise versa. In other words, if a remote control door locking mechanism works, a chip to start the vehicle may be calculated and vise versa.
Creating a key when all keys are lost:
Making a key is easy. When all keys are lost and there is no chip or remote to based a calculation off, the data contained in the SKREEM is read. Using the date from the SKREEM a new key (chip and remote) is calculate, and programed. It is important to note that the vehicle can only communicate with a certain type of the chips, which is known as 7935 chips and can only hear waives at 315mhz. Using any chip, not compatible with 7935 or transmitter, which cannot operate in the same waives as SKREEM, will result in failure.
Creating a spare key:
As noted above if a working chip or remote is available, new key is calculated based on either and programmed.
Start Error:
If the transponder does not transmit the ID stored in the SKREEM, the SKREEM considers the key to not match. No signal is send to ECU, car would not start. Trying to start a vehicle 3 times without transponder will register in the ECU, and the starter would not even crank after 3 attempts.
If SKREEM, for whatever reason, looses its data and even a correct key is used, an incorrect data is sent to the ECU, then the motor would not start. Notably, ECU will permit you to crank for 3 times until, the starter will not be reacting at all. During those 3 attempts, it will feel as a vehicle trying to start, but almost as if it is running out of gas. To confirm this symptom, you may disconnect and reconnect after 10 seconds the battery, which will erase the code and will permit you to crank the motor for 3 times again. **I have seen one vehicle which only cranked once before going silent.
When you have a "Start Error", the codes written in the Key, SKREEM and ECU needs to be rewritten before the vehicle would start again. SKREEM and ECU also has a VIN number written in them, which is readable with any diagnostic equipment, which make those parts specific to the vehicle.
When servicing "Start Error" I normally create the entirety of the software, which I write into the ECU and the SKREEM. My software matches any existing key, which permits the existing key to work with the newly programmed set. I sure match the VIN to the vehicle, so no issues may occur at any subsequent inspection of the vehicle.
When making a spare keys, I use only brand new parts which I can easily warranty.

I hope this provides sufficient explanation of the immobilizer related issues, but feel free to ask any related questions after reading the entire post.