I looked into the tankless deal recently because my water heater had rusted out and was costing $55/month just in gas!
The tankless units I saw cost twice as much as a standard tank heater and would replace a 40gal tank unit, but they all said 'one major application at a time', meaning 1 shower going...1 load of laundry going...or 1 dishwasher going. That would never happen in my house (7 children and a wife that loves the smell of fresh laundry).
I do want to comment on the 'keep your house the same temperature' myth. Case studies show that in fact, it is more economical to kick the furnace on (or a/c) when you get home from work and kick it off when nobody's home. It only takes 20 minutes to get things back to the preferred temperature. Granted, if you live in a cold weather climate like I do, you should leave it set to well above freezing.
I must be a scrooge though because I haven't so much as fired my furnace up except to make sure it was working and ready for winter. I've got a couple of electric ceramics, a fireplace, and a kerosene heater that I've made use of on some real cold mornings, but if it's 45 outside, the house stays around 60-65 with the fireplace going and all those little ones running around. Plus my office has 2 computers in it so it's always warm in there...were we talking about water heaters? LOL
On the outdoor furnace, I installed one for a friend and they are very nice. Heats the baseboard heaters well. Heats the water in the hot water heater so hot that a mixer must be installed to mix cold with the hot or you will burn yourself. He only uses that feature in the fall/winter though because he shuts the furnace off in spring. I'd get one but I live in the city.