I realize this thread is a bit aged, but since it's right along the lines I will have to follow in the (hopefully distant) future when I replace my 10yr old water heater, it helps to get the info/advice before hand.
Currently, mine looks like a hack job. It's 1/2" going into the heater, right up to what I now realize are dielectric nipples.
The reason I came here was to find out whether there was a reason the previous install used these galvanized nipples, and found that they were the dielectric that are apparently supplied with the WH.
I have 1/2" unions on both the hot and cold, and will be upgrading to 3/4" on the eventual new install, since I already replaced the mains coming up to the mess with 3/4" copper.
I kind of thought the unions were absolutely necessary to make eventual replacement easier, but now that I have done a lot of copper sweat, I realize that it's just as easy to cut the old pipe and sweat in the new.
Just have to be sure never to sweat close to the WH.
One thing that complicates my situation is that there are T's for supply to the bathroom, and the furnace close to the WH, but I can reconfigure it to make it easier.
As far as the gas connection to the WH, is it OK to use a flexible connection, or does it have to be pipe?
I hope that I won't need this info for a while, but I'm thinking of pre-assembling most of the new install so that when (not if) the time comes, I'll be able to buy the water heater, call the inspector, and have the job done and ready for him to inspect by afternoon same day.