Normally, i just use this forum to check out the upcoming events, but saw this post on tankless water heaters and felt compelled to comment. I've been working in the industry for a few years and thought I should reply. (Yes, I registered just for this).
I've worked for two companies thus far who sell and install tankless systems. Both sell Rinnai and Navien units. Navien systems are slightly more expensive and 98% efficient, but both will run you about $3000 for install.
If you want, you can fork out the $300 (or so) for the first ecoENERGY evaluation *the federal government will rebate half of the cost of the first evaluation (up to $150). After installation, you will be required to have a post-replacement evaluation and that will run you about $150 and there is no rebate for this. You will get back $500 from the goverment. To find out if it's worth it to you, do the math. Some companies will offer a discount on the equipment if you use them, or their licensed ecoENERGY partner to do the evaluation. These also qualify for the Federal Tax Credit for home renovations.
You can also rent a tankless. Currently Sears has the lowest rental rate of about $30, i think and EnWise is the highest at $39.95/month. You will still qualify for ecoENERGY rebates if you rent and in most, if not all cases, the rental agreement is fully transferrable to a new homeowner, and most should have a buyout. Newten, Reliance and Sears are probably the biggest ones renting. EnWise says they rent, but I think it's actually a financing agreement. Enbridge is now offering a $300 rebate for tankless systems. Most reputable companies sell Rinnai and Navien. I'm not sure about Navien, but Rinnai is a Japanese company that's been around since 1910.
People should keep in mind that these systems are not exactly the same at a hot-box or whatever they call them in Europe/England since many houses have multiple smaller units made only to service the immediate faucet. You must double check your load supply to make sure your gas line can accomodate the equipment - most can, but just in case.
You cannot install a Rinnai or Navien on your own. They don't allow cash-and-carry. This is to protect their warranty and the intergrity of the equipment. If you have hard water, you must have a softener or your warranty is void. If you have low-flow shower heads you must get rid of them since they don't allow for enough pressure to trigger the system.
You can certainly buy and install on your own, the cheaper models they sell at home depot, but with something like this, it's my advice to have it done professionally. Also, you should have a Sales Rep or a professional make sure that the system you're getting is appropriate for your home and your family. Some people run two or more systems depending on the size of your home. Also, you want to make sure that a tankless will go in your home. if you're in a townhouse, it's likely not going to work unless you have a corner unit. If you're in city-centre toronto, you want to make sure you have enough clearance from your neighbours to allow for the venting.
Electric systems are available, but not from Rinnai or Navien and they feel that electric tankless systems aren't worth it for environmental or economical reasons. Rinnai works on natural gars or propane. Navien, if I remember correctly is natural gas only.
Anyway, have fun yanking your tank.