Sludging was a problem with a number of the model years. Toyota agreed to fix the problem, but put a time limit on their liability. From what I've read, it was poor engineering in those model year engines. The stench may have been the catalytic converter - smells like sulpher when it goes out. That is a pricey repair. Be cautious about the late 90's Camrys - have it checked out before you invest in it.
I have a Camry 99 CE. I have 300 000 km on it without any problem. The most expensive maintenance was changing shocks and stabilizers. I always put synthetic oil in every 5000 km and transmission oil every 100000 km. I don't push the car over 2800 rpm, never... This car has a better gas mileage than new GM and Ford cars with the same engine... It's incredible. I hope the new models have the same quality.
I have a 1999 Camry LE 4 door sedan and have had no problems with it. It just turned 84,000 miles today.
If the smell you had was like sulfur or a rotten egg, than you probably had a faulty catalytic converter. This was a problem not only for Toyota Camry's of this model year, but for many other cars, including the Honda Accord, due some California emission laws that came out around the year 2000.
Not all cars had this poorly thought out high tech equipment, but many did, especially the ones that Toyota intended would head west. My car sometimes has this problem when idling for periods of time longer than 2 minutes, but it's not good to idle anyway, so at this point I really don't care. I have gotten through every single emissions test here in Connecticut. It's a shame you had it bad enough that the engine light came on.
Oil sludging was (and still may be) the most significant red flag one should consider before buying a Camry, but if you change the oil at 3,000 (city) to 4,000 (highway) intervals, you should NEVER have any problems (unless you have a lemon). It may say somewhere in your original manual that Toyota/Lexus cars can be changed at 7,000 intervals, but that is a load of b.s.
Don't be fooled. Toyota is one of the most reliable auto makers on the market. I have never really done anything to my car except change the oil at 3,500 intervals and a few lights. It has been true these last ten years and I plan on keeping it ten more. However, I have nothing against Honda, as my mother has had no problems at all with her Accord for her first five years of ownership.
One things you forgot to post for all of us potential Camry owners... what ENGINE did you have? Four or V6?