Has anybody tried one of these water heaters.

Had one on my sailboat about 20 years ago and it did an EXCELLENT job of producing warm water. Hot water.....not so much. They've probably improved them a lot in 20 years though :) The only down side I'd look at carefully would be that they're likely a fuel hog. A good portion of the hot water you use with the conventional heater you get from a heater that hasn't ran in quite some time (I turn mine off after morning showers and still have hot water for washing evening dishes and bed time hygene. With a demand system you would have to heat the water for each use. Just take fuel use into consideration if it matters to you.