gas hot water tank corrosion at lid

[DLRutherford]

I just noticed some corrosion around the "lid" of our American 50 gallon gas hot water heater (installed in 1999). Also noticed some corrosion around the opening where the pressure relief rod comes out. Question - is it time to get a new hot water heater before it leaks everywhere? Does the sacrifical rod need to be replaced? Should I just get a new heater now and take advantage of the energy tax credits that expire December 2010? Is the ultra high efficient model (> .82) worth it - our utility company offers a rebate for those models.
Gas hot water heater is in utility foom of finished basement next to furnace. Currently no fresh air intake from outside feeding the room. Utility room is on an outside wall.

Thanks in advance for any advise!