The inuse only water heaters have a good track record. While it is hard to believe considering the massive amount of power being used at time water is running IT DOES SAVE YOU A GOOD DEAL OF MONEY in electrical cost.
Consider a 4500 watt water heater element that cycles on an off 24 hours a day 7 days a week whether you are there or on a long vacation. The heat must be maintained in that water heater. There will never be a day that water heater does not run often in a 24 hour period at 4500 watts any time it cycles on and off.
Now consider an inline inuse only water heater that pulls 100 times that much power as a normal water heater but only runs that short time your faucets or tub or washer is running using hot water. Otherwise IT USES ABSOLUTELY NO POWER WHILE NO HOT WATER IS BEING USED.
Read up on the electrical demand of that in use water heater. That is the set back. Often times that in use water heater needs equipment to run it more than your entire house uses at any given time. A house with a 200 amp service may need upgraded to a 400 amp service to handle the inuse water heater.
While it does save money in electrical use it will take much heavier electrical power equipment.
You might want to check the following link, not trying to sell anything, just had that link that may be of some help.
http://www.tankless-water-heater.com/
http://www.termotronic.com/
Good Luck
Wg