Hoses, pick your poison. I've drank water out of the worst and lived to tell the tale but I can't imagine all that rubber or plastic taste is good for a guys health. A 25' white hose at Camping World is still around $10-$15, on sale, IIRC.
The thing about the on-demand heaters (gleaned from Internet posts, never owned one) is that they cycle so you may be showering with intermittent cold/lukewarm or hot water. When I was looking at upgrading my old 6 gal heater with a new one, there were Suburban dual electric/gas being sold on E Bay for around $275. Single source propane replacements could probably be had cheaper. I would be looking at RV salvage yards for a good deal.
