What I've read about them says that tankless water heaters wear out faster than the traditional kind with a tank, and that the replacement cost eclipses any energy savings in using one. They are also reportedly less convenient and comfortable (due to a cold water "sandwich" effect as they send water down the line and attempt to sense how much heat to apply to the next water coming through). If those articles and reviews are wrong, I have yet to find any reports of it.
For cool water heaters, look at a point-of-use water heater for sinks to get instant hot water, and locate the main water heater directly underneath or next to your shower plumbing. Those will actually improve your lifestyle and save water.
But at the very least, take Tronster's advice and install technology that serves a purpose in your house. If you're on a tight budget, wasting money on things to impress your friends is probably unwise (read: it's beyond stupid).
Almost twelve years ago, Slashdot posted an article about the caffeine gene in coffee plants being isolated. At that time, the Futurama references were fresh, but what we all wanted was caffeinated bacon (and baconated grapefruit). Or at least caffeinated apples. An apple with caffeine would solve 100% of the problems in my life. The future was promising. We all believed that genetic engineering would allow this gene to be spliced into other vegetables, animals, and yes, even minerals by now.
Now, over a decade later, the last great promise of the pre-9/11 world has been broken. We are using science not for good, but for evil. Our only hope is that the scientists committing this blasphemy drink their own creation and fall asleep before they can finish their work.
Variables don't; constants aren't.