Tankless water heaters?

[Wilson Churchill]

Can anyone share their experiences with using tankless water heaters? I had to replace an electric water heater recently, and someone at the city building department recommended using a tankless unit. I was surprised to find that there are models available for only $300 to $400, which would meet the needs of my homes, since most of my homes have only one bath..

There is this natural gas model by Marey that generates 4.3 GPM for around $310.

Home Depot sells an electric model EcoSmart that produces 3.5 GPM for $362:

http://www.homedepot.com/p/EcoSmart-18-kW-Self-Mod...

It seems like these could actually be cheaper than the old tank style, and would be fairly easy to install.