If you can afford it, tankless water heaters are definitely the way to go. I couldn't get one when my water heater died both because of money and because of how my house was constructed. There was no safe place to install a tankless unit. I want to someday get the smaller unit and have it heat water for the hall bathroom. I use that most days instead of the master bath, and it's the last room in the house to get hot water. Takes *forever* for hot water in that room.
