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We just built a house & I examined the tankless thoroughly. The biggest one I could find would heat enough water to run three appliances (fixtures) at a time. That probably sounds OK, but when you have the dishwasher going and laundry, you should not expect to wash your hands or face in much more than luke-warm water from what I was told. The three appliance one I was looking at could heat X number of gallons 70 degrees, which sounds fine unless you live in Michigan where the tap water is about 35 in the winter time. 105 degrees for a bath is marginal for most people, and again assuming nothing else is running.
It sucks to constantly heat 40 gallons of water and know that you are wasting cash, but we couldn't do it tankless unless we bought two of the three appliance units and then were very careful as to how our plumbing was setup. We have a three bedroom house with two baths currently and probably add a third when the basement is done. The cost of the units plus the plumbing nightmare (#1 should heat the dishwasher plus one bathroom and the kitchen sink, #2 to supply one bathroom, the laundry, and the utility sink, what about the third bathroom?) was enough to keep me conventional.
For a two bedroom apartment or small house I'd say go for it. Otherwise, get a gas fired tank & wrap that rascal with the blankets they sell for $30.
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