Ken, what's funny with HVAC/hydronics is that depending on what part of the country you're in, people have different "terminoligy"
Sort of like when someone talks about a hot water furnace and it's a boiler
When you say hydro heat, do you mean a boiler with baseboard or a water heater with a hot water coil in the ductwork? Or are you refering to Dave's little house of horrors?
When I first came to N.C I had no clue what a "gas pack" was. Had the guy explain what it was, and I said, "oh, a package unit, you set them on the roof". He replied "no, you set them on the side of the house". I learned quick enough that you don't have a lot of basements in N.C.
Actually, over the weekend I was thinking about having my well water tested again, since last year when we put in a water conditioning system (we did have some very "hard" water when we moved in and the house was unoccupied for years). I have thought about the issue with the heat exchanger in those water heaters (reason for wanting to test my water), but honestly, have not heard anything from anyone about it in the last three years selling them. I've been to one manufacturers facility in Georgia for certification, and again, nothing mentioned about "large issues" with the heat exchangers, but it was brought to our attention about the possibility of issues depending on the quality of water.
Since I have a 50 gal direct vent water (already have a hole in the wall)heater in the basement, and it still takes a while to get hot water to the third floor, and my wife still can't fill the large tub with hot water before running out, I'm leaning in the direction of a continuous water heater. Actually wouldn't be that much more than replacing the current unit (which is getting old).
Remember, they're called a "continuous" hot water heater
. When you say "instantaneous", you're implying the homeowner may have "automatic" hot water at the outlet, and depending on the run to the outlets, you may have a disgruntled homeowner because unless you put in a small point of use electric or circ pump (which I'm not fond of), you may have a disgruntled homeowner when it takes more than a couple of minutes to actually get the hot water.
P.S Come on Ken, nothing runs like a Trane (I'm being sarcastic
)