SD- I would assume, that, although the hot water from the engine is "very" hot, it will / may not heat the actual water inside the tank to the same degree, as you would have loss to the exchange unit, etc, and it will not be giving off all of it's heat as it passes through. I will keep an eye on the temporature, however. Thanks for the word of caution.
HS - That was a great description, of the y / t valve. That is the setup on my engine. The short hose I described earlier connects the engine to a "t" fitting thermostat. I will have to look at it again, and will make sure that I am on the final "hot" side of the engine. It was this "t" fitting with teh short hose going bto teh engine that confused me. Didn't like not understanding why it was there / the flow of things!
Good advice on spare hose and anode.