One thing to keep in mind if you are going to replace your current tank with a tankless system is that your plumbing system has to be replaced. Every sink, bathtub/shower, and even the toilets have to have their own seperate water feed from the main water line. If you are going with an electric unit, you may have to upgrade your breaker panel, as you need something like an 80 amp breaker to run the electric unit. If you are using gas, you have to have a 1 inch line supplying the unit. All of this is in addition to the base cost of the unit. I have heard that the home units are OK if you only have a couple of people living in the house, and the demand on the unit is not very great. The unit will only work as hard as it has to to produced the amount of hot water that you want. It has several burners/elements that will turn on and off as demand increases and decreases. If one person is in the shower and someone else is using a sink, there will be some variations in the temperature of the water as the unit turns on and off. That is my only personal experience with a tankless water heater, trying to take a shower at a friends house while he was using the kitchen sink. Not all that pleasant. But on the other hand, you can take a one hour shower and never run out of hot water.
Murdock.