Right now I am using a conventional through the wall vented water heater for hot water as well as a radiant floor heating system. It uses 2 loops ( 1 for the water heater and 1 for the floor circuit) with the same type heat exchanger you mentioned. They do sell tankless water heaters for this purpose, but I decided to just use my existing tank type heater because it seems to be quite efficiant and it has a very fast recovery. I don't see why a tankless water heater couldn't be substituted in if my existing heater fails, in fact I was thinking of doing just that if it ever comes to that. The house I moved from had a tankless water heater in the basement and it worked great! The only problem I had was, if I was taking a shower on the 2nd floor and I backed off on the hot water too much, the back-pressure made the unit shut down. Yes, that screaming you heard was me! I had to run the tap in the sink so as not to allow the heater to shut down. We had it for at least 20 years and never had a problem with it and it was still working like new when I left. I would think the newer units are more sophisticated and wouldn't have the problem I had. Tankless water heaters are all they use in Europe and they've been doing it for years. When I was in Germany, the house I stayed at had only a one pipe plumbing system and they had a point of use tankless gas water heater at every location. I'd be in the shower and here is this creature hanging on the wall next to me. It worked good though!

Jim

So you've got a tank heater with a single hot output?