I can only relay our families experiences with a different brand of tankless water heater then you are considering. We are now replacing a unit that was installed in Nov 2006. Yes, that is after only 3 years and 9 months with a 3 year warranty on parts and 1 year warranty on labor. The system we have (are replacing) was a Stiebel Eltron Tempra 24 Electric (T-24). House is 2100 sq ft having 2 bathrooms and 4 persons.
Many of this website’s “Tankless, Its Limitations, and Interesting Alternatives” article’s points are sound and the advise good.
I would say that we did experience some overall utility cost savings but this was compared to a contractor grade gas water heater (with gas prices skyrocketing) and should be balanced against the much more expensive cost and installation of a whole house tankless water heater.
Lastly, the warranty on parts is considerably less that traditional water heaters and I’d go further to state that the complexity of design of these systems creates more opportunities for things to fail than traditional water heaters.
All our opinions based on our actual experiences.