In September '06, we replaced our 40 gallon direct vent gas water heater with the same. The "new" one is now leaking. Really?
While I love the idea of a tankless water heater, I don't see how it would be worth the cost differential. The two of us use <$10 worth of gas per month for heating water (much more gas is used in the winter for heating, of course, but it's the only thing that uses gas in the summer).
That 9 year old water heater (with a stinkn' 6 year warranty) cost over $1300 (installed, permitted) back then. Some of it was probably new safety features (a thick metal pole to make sure you can't hit it with a car, an expansion tank for...well, I'm sure it's for safety).
Is that the best we can do? Options? We don't see any with longer warranties online.