I've been lurking here for a few months and just had to put in my 2 cents...
I too was star struck by the concept of a tankless water heater. It seemed intuitive that removing the idle 40 gallon tank of hot water would surely slash my gas bill. And I'm in a situation where it seems much more appealing. My two sons moved out about two years ago, leaving just me. They were famous, like most young people, for using copious amounts of hot water for their multiple and long daily showers. Without them here, the hot water heater goes unused for most hours of the day.
Being the inquizitive type, I decided to check back through my old utility bills and just see how much Natural gas I use, before and after my sons left. In particular the months of June, July, and August - the months I knew that the furnace was not operating. The following is the amount of natural gas used for those three months combined:
2003: 95 therms
2004: 85 therms
2005: 37 therms
2006: 32 therms
As you can probably tell, my sons left in late 2004. Using a generous estimate of $1 per therm, I am currently paying all of $11.50 per month for natural gas used during the summer months. Even ignoring the fact that I also use a natural gas stove and clothes dryer, as well as the recent spike in natural gas prices, this is hardly an indication that the hot water heater is an energy wasting monstrosity and, at least in my opinion, blows the "energy efficiency" argument in favor of the tankless right out of the water.
Edit: I should also mention that the hot water heater is located in the basement, where the temperature is usually much cooler than the air in the rest of the house and outside.