Many tankless systems' warranty is voided if you use them for space heating I've been told. They are designed for sporatic use, not constant use. You'd need a heat exchanger if you were going to use this as your potable water source as well, since generally, it's not a great idea to have long lines running to radiators that you then bath with. The heating system needs to be protected from the fresh supply of oxygen you'd get in an open system verses a closed one as well.
As noted in the boiler section of the forum, your existing boiler is probably at least 2x oversized. Personally, I'd go with a boiler and indirect. Trying to make a device do something it wasn't designed for often ends up being more expensive in the long run, and may not work correctly.