My take on tankless heaters is as follows.
If you will just dump the shower water, don't have worries about storage tanks and don't have worries about limited water supply, then get a tankless heater could be great. Even better yet, the Ecotemp units can be had cheap, run on batteries/propane and can be set to whatever is your ideal shower temp. All you need is a single on/off valve to run or stop water flow and you could have one for the shower and one for the sink.
Now ..... if you plan to boondock, have limited water supply or have limited grey storage then you do not want a tankless unit. Boondocking = using AS LITTLE WATER AS POSSIBLE AT ALL TIMES. Tankless heaters will not work when you are just above a trickle and that is how I end up operating when I dry camp over a long weekend.
Jose