As part of the pool install, we installed a wall-hanging, tankless hot water heater today... well, we didn't -- Water Heaters Masters did. Casie discovered them through Angie's List.
We really didn't need a hot water heater, immediately -- our old water heater had anywhere between 3 and 7 years left in it, but we're putting the pool equipment in the room, so (1) the space-saving will be nice, (2) we'll eventually need a water heater and pulling out the old tank over the pool equipment would be tough, (3) if we ever did want one, we'd have to upgrade the gas line (larger) and we already had a trench dug... so it just made sense to install one now and not have to worry about a hot water heater for another 25 years.
We also seriously oversized the gas line, too. Given that the run was over 50ft from the meter, the new line had to be at least 3/4in if not 1in... we went to an 1-1/4 line in the case that the existing, old line ever gives out and/or we ever want more gas doodads in the back yard (grill, firepit, pool heater, etc). Again, with the trench, it was a now or never thing. I'm not thrilled with the pop-through location below the dryer vent, but it's the only clear spot for the run. When painted, if should be OK.
Matt and Alex showed up at 8AM and in short order had the old unit out and the area clear. This gave me a bit of time to sneak in and put up some pegboard to clean up the space a bit. By 2PM, we had hot water again...
It works well. I'm not expecting huge savings on energy, but that wasn't really the point of the install.