For a more efficient way to heat water, go tankless! Water is heated quickly and delivers an endless supply of hot water as long as you need it. With a tankless water heater, you only pay to heat the water when you need it and for as long as you want it rather than a constantly heated Standard water heater which is heated and reheated all the time, even when your asleep. I have been researching tankless brands and like the Rinnai. This is the one we are planning to install in the house we are currently building.
For more information on which unit may best suit your needs please visit: http://www.foreverhotwater.com/
Amy McAllister Realty LLC 541-490-1436
Hood River, Oregon amym@gorge.net
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Disclaimer: I assume no responsibilty for accuracy of information provided within this post and blog. Many entries on this blog are based on the opinions and ideas of the author and are provided without warranties of any kind, either expressed or implied.

Sam,
Unless you have recirculating pump to keep hot water flowing in the supply lines, it takes about the same amount of time for hot water to get to the fixture with either type of heater. (It's a *bit* faster to get warm water to fixtures above a tank type heater is there is a small amount of movement due to convection even absent water flow.).
I have a tankless WH at my home, my office and at 3 of our rentals. They can work well, but we encountered a LOT of issues when installing them. I have a web page up where I discuss some of the problems we have encountered, and how to avoid them. It also has a link to an OA Smith white paper on calculating the payback of tankless heaters.