I was going to get a whole-house tankless water heater, but changed my mind
after reading various forums with lots of complaints about them. I like
the idea of tankless, but want to wait till we move to a better house,
where it will be easier to install one at every hot water faucet, and when
the technology might improve such that you could use any amount of hot
water from 1/10 GPM to 5 GPM, without any hot-cold sandwiches etc.

But I'm still shopping for a water heater. I want a high efficiency, high
recovery one, but only 18 inches in diameter. That's a lot to ask, because
it doesn't leave much room for insulation. It would probably have to have
a special kind of insulation that provided more insulation per amount of
thickness. I would be willing to pay about twice the price of a normal
cheap water heater. Is there anything available that would provide what I
want?

My present water heater is 18 inches in diameter, 40 gallons, but not very
efficient. And it's old and has a leak. I want to hurry before the leak
becomes serious. What would be my best bet in this situation?