I used one in a friend's house (showers, etc) that worked great. Can't tell any difference from a tank system.
So it gives me hope that they can eventually come up with a workable system.
As I have posted before, the new Atwood tankless is very promising because it addresses the usual shortcomings with two levels of burner heat (15K & 50K). So it should work at both very low flow and higher flow. Reviews seem to be very mixed though and it would be great to hear form someone on the forum that has used this model.