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What has been your experience with on demand water heaters? Do they really work, and are they reliable?

I need to replace my water heater and I am considering an on demand type. My current water heater is an electric, and while it would be easier to replace with electric, I could also replace with an on demand gas water heater.
If you have had experience with the on demand type, would you want another one?

USA I think they are excellent. My brother used to get his hot water from the boiler for the home heating system. In the summer (when heat was not used) it used to cost him $100 per month in gas to have hot water. We put a tankless water heater, and his bill dropped to $26 per month. The water heater is a larger one - sized to supply hot water for up to 3 bathrooms simultaneously. It works great, no problems at all. An added benefit is that you can set the temperature easily, and set it by degree - for example 105 degrees, or 112, etc... not just set the heater to warm or hot.

I presently have a 40 gallon standard gas water heater. I am paying to keep 40 gallons of water hot 24 hours per day. That is a waste of money and energy. When it comes time to replace my water heater, I will definitely install an on-demand heater.

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