I replaced a gas-fired Wolter demand heater with a more conventional Isotemp heater in 1999. The Wolter unit had been notoriously unreliable and wasted a lot of water, even after having the Wolter folks upgrade the ignition system. I recall that this type of heater was implicated in carbon monoxide poisoning--including deaths. Mine was installed in the engine compartment that was ventilated by a blower when the heater was in use.
I am much more comfortable with the conventional water heater, which is a pretty basic piece of equipment. A demand heater, by comparison, is a complex piece of gear with more parts waiting to break.