I have two commercial model (tan color) Rennai tankless water heaters. I did not realize when I purchased them that I really wouldn't need the commercial models, and would go with the standard residence models if I did it again. The commercial models have about a 20% higher BTU rating and their thermostadts go to 180 degrees rather than 120 degrees. I can tell you from experience, you don't need 180 degree water in your house. My commercial models are backed down to 120 degrees now.
We have a family of 7 and have never run short on hot water even when we have 3 or 4 showers going at once; no matter how long the showers. From researching the tankless water heaters for months, I've found that the typical Rennai unit goes about 15 years before needing anything replaced. Then all components are replacable, so you really almost never have to change the entire unit.
I'm well pleased with our units. They cost me around $600 or so and are much more efficient than the old tank systems. For me to buy the 80 gallon or larger water heaters for my home, the tankless water heaters did not cost any more than the obsolete tank units. I seriously doubt that you will see any of the old style tank water heaters being installed in another 5 to 10 years. They are very poor with energy useage, they run out of hot water, and they do not last as long, and they are mostly not repairable when they go bad.
I have a nice used 70 gallon State water heater sitting in my barn. Need one? /forums/images/graemlins/grin.gif
Oh yeah, after almost a year of useage, there are a few of what could be considered "drawbacks". First, it takes about 5 to 10 seconds longer to get hot water. Second, with the low water consumption front loading washing machine, it helps to run the hot water for about 30 seconds in the slop sink next to the washer to get hot water to the line before starting the washing machine. (sort of the same as the first issue) Third, the tankless water heaters made my utility bill drop about $15 to $20 per month. I don't get to write checks to the utility company as large as I used to. (they'll make it up by raising the costs though) So, personally, I'll take the drawbacks after all things considered.