Wow, just wow. This is really terrific feedback, I want to thank everyone for sharing their input and experiences.

Roomie et al:
I have just recently spec'd 2-element Eemax Instantaneous Water Heaters (IWHs?) for each of 50 elderly apartments in the StLouis area, and they work like a charm to deliver endless 110F water for these tenants. They are single tenant units, so they only use a 1gpm kitchen sink OR a 1/2gpm Lav OR a 2.0gpm shower head OR a 2.5 gpm tub spout. You just have to make sure you don't exceed the flowrate curve versus the entering water temp that determines your temperature rise (dT) in winter. Anywhere around mid-US can get entering CW temp down to 40 EWT in winter, further north gets down to 35 EWT around Chicago. A 2-element gives you about 55dT at 2gpm, and nobody likes taking a 95F shower. What this means is that your washing machine or a high-flow shower or multiple users at once in a full size house would overcome a one or 2-element unit without pre-heating or a buffer tank, but with preheat it's awsome and endless 110F.
If your desuperheater system already exists and will preheat sufficient water, or you go with a large tank, but just need a "boost," you may even get away with a cheaper single-element unit. *If this was standalone for serving a household, I'd recommend a 3-element and the buffer tank anyway.
With the units I have spec'd, each "element" or stage-of-heating may need it's own electrical circuit, typically 40 Amp each, so a 2-pole 40A breaker with #8 AWG homerun wiring will do it for each stage. A few others combine the electrical for a single connection, which obviously makes it a larger homerun. Luckily, the wiring is very simple, everything else is built-in to the unit for control, with a tiny outlet temperature adjustment on the inside.
For the electric instantaneous water heaters, there are some old-school inspectors who will insist that even though these units are UL listed, have >0.25 gpm flow-sensing control of the heating sections so they never heat with no flow or under pressure, and are designed for safe operation ensuring only "atmospheric" pressure - since an outlet must be open for operation - some think a T&P valve and/or expansion tank must be installed "somewhere" anyway. Of course, some lizards could still be classified as "dinosaurs" as well; but be aware if it's a commercial installation you'll need to find out who the AHJ is and make sure he realizes the intent of what you're doing, and knows how to read a manufacturer's cut sheet. You can save an owner thousands of dollars by deleting floordrains from a building's-worth of linen closets, along with no building hot water main piping network, to offset the higher cost of the tankless units, since there is no T&P valve to 'plumb' to the no-longer-needed drain in a tenant apartment unit.
Heads up though; some electric IWH's have an option for a "cutout" element in case outlet temp looks higher than some adjustable or selectable 'safety' temperature, either in case a thermostat controller lets an extra element over-heat the water accidentally or possibly to overcome the dinosaur issue noted above. As a result, an indirect tank fed by solar or wood burner reaching higher than 120F could temporarily disable your IWH. (A solar collector option for indirect heating of your buffer tank is capable of heating the water much higher than 120, and would need to have an aquastat to stop the flow to the tank at high temperatures.) I've talked to one other engineer who thought a TMV with a ~105F setpoint, feeding the IWH with a mixture of >120 hot water and incoming cold water, would do a great job of making sure the IWH 'always' provided a slight bump in temperature. But that's adding yet another piece of hardware you may not need.
Basically, any pre-heating strategies like a buffer tank fed by solar collector or WSHP desuperheater, the shower/drain heat recovery coiled-piping units (on the incoming CW piping), or even just a length of pipe run first up and along the peak of the house or through a conditioned attic and back to the unit (see below*), will all help temper or preheat that incoming CW temperature and may be all you need, letting that little IWH do a great job of keeping your hot water topped-up to the setpoint. Once you decide you want to invest the $1500+ into a tankless on-demand water heater for boosting the output of your buffer tank, the answer is "yes," it will work great.
If you already have a heat pump desuperheater, that will work perfect - in conjunction with a buffer tank as previously mentioned. I personally wouldn't go buy a new tank just for a buffer unless you have extra cash laying around and just want a brand new equipment installation. In that case buy an indirect coil tank. Otherwise, perfectly good tanks with good insulation can be found free at plumbing contractors all over town when they replace a water heater. Just ask them for one they think is in good shape on the inside, and be sure to clean and flush it well, fill it up with bleach water to disinfect, etc. following the usual recomendations for reusing one. It will likely already have a T&P valve on it and a drain valve at the bottom. Electric units will have an upper and lower threaded hole to use as well.
IF you have concerns about potable water/closed system issues, wait for an "indirect" tank that already has a coiled tube inside to come available, or purchase a copper tubing fitting that fits into and screws into the existing hole so you can retrofit an existing element tank with an indirect tubing setup instead, to pipe your heatpump through.
The various concerns about whether the unit "monitors" the incoming temperature or only monitors it's own outlet temperature comes down to whether or not you ask for and order the appropriate model. They offer units with and without that option or 'mode' of operation. I don't think you need the extra expense, as you get to select the outgoing temperature on an adjustment setting anyway.
* I'm considering taking my own hot-water tank feed line up to the attic first and through the attic below the insulation, to make a CPVC residential sprinkler loop. I'll return from the far end of the house and then down and back into the hot water tank, and get to temper my tank refill water for free from attic waste heat. I've already verified that my minimum attic temp at 5 deg F outside is about 42 deg F. Insulation-board on the bottom side of the roof deck trusses, above the blown-in insulation (on the ceilings below) keeps the attic warmer without stopping airflow on the bottom side of the decking. So I'm sure that below the insulation and with daily flow through the main trunk line, the piping will be even safer from freezing, and I'll get to protect my home and family from fire with a "green" excuse to pay back the cost of the piping.

- Hmmm...that got a bit long...sorry bout that. I'll try to keep the next post a bit more brief...;)

i have a electric on demand hot water heater with a 85 gallon rheem marathon buffer tank that is heated by my desuperheater. mine is a Steibel Tempra 29 and it senses incoming water tempurature and throttles back or turns off the power depending on incoming water temps. it hasnt turned on at all since october or november, the desuperheater keeps my 85 gallons warm enough to supply 2 adults and to children.

Bumped this thread because the question has come up again,
also felt a need to add to a few of the comments above.
Actually if you are still out there RSanders, now that you've had them for a while are your water heaters working well? I poked a little fun but I really would be interested to know if your demands are being met by your new water heaters.
Joe

Can a heat pump supply on demand hot water AND heat pool AND cool house? 

The info on this site is great, but I don't know where to begin, and honest, skilled contractors are rare down here in Sunny South Florida.  I ripped out old gas pool heater and gas tank, so I'm all electric.  My central air system is about 25 years old and my old water heater is so far from bathrooms that unacceptable amounts of water is wasting bringing water temp up for showers.  Attic needs insulation and I'm considering radient barrier to keep extreme attic heat out of interior.  I want to take advantage of all this excessive heat in attic and environment to heat pool and hot water.    I think I need tankless hot water, to prevent wasting so much water. I have a South face roof that is about 1000 sq', so solar makes sense here.  I love the idea of harnessing the drain heat too!  Can my swimming pool serve as a buffer tank?  I will appreciate your suggestions!

Recent straw poll on two sites wuggested most of the contractors here (and there) are not in favor of tankless water heaters.
That said experience also suggests more problems in wter to air heat pumps that also do on demand hot water.
Can geo do what you ask? Yep, but do lots of home work.
Good luck,
Joe

Hi, I am getting my climatermaster Tranquility 27 hook up to my old propane water tank which will use as preheated storage tank, and then feed it to steibel tempra 29 also, can you tell me how it works for you since you got it and can you also tell me how it is setup? you said that your water is hot enough in the buffer tank that the tankless hasn't turned on at all, is the true?

If several days go by with no heating or cooling demand such as during spring and fall in many areas then there is zero btu added to the buffer tank for those days. That means the domestic hot water system, comprised in whatever form or combination of tank or tankless units, must tote the entire hot water load.

As has been noted, no one likes a 95 degree or less shower while the clothes washer or dishwasher is filling itself or a house guest is using hot water or...or...or...

I Ended up getting a ThermoDrain from EcoInnovation.

52% efficiency and cost $500 plus shipping.

I figure I have a payback of 3 years versus 4 and 5 with the other brands.
GFXTechnology nows sells the cheap Watercycles products as Low Copper GFX's. These units have very low efficiency ratings and cost as much as their competitors.
Powerpipe was dishonest in their product marketing by making false associations to UL certification and Energy Star ratings. Both have absolutely nothing to do with Potable water or drain water heat recovery.

For what it's worth. I upgraded my desuperheater on my dx system this year to a newer one. Anytime the system has been running in cooling mode it makes more than enough hot water for my house of 3. My 50 gal elec tank stays at 140* with just the desuper heater. I've actually had the breaker off for my DHWH for most of the summer. The desuperheater keeps it at a much higher temp than it is normally set for 120*. Over the winter I intend to add at least another 50 gal tank as a buffer. Just to store all the hot water my sys can make. Maybe even come up with a way to circulate water between the 2 tanks. I'm also going to install a tempering valve that induces a little cold water into the hot line on the output of the main tank as well. The temps from my desuper heater are just a little too hot for comfort at the spiggot. These weren't real commonly installed when I built my house. I have not used the new DSH in heating mode yet but my guess is it will probably be working in that mode as well. The sensors will kick on the circulater anytime there is adequate temp in the refridgerant lines. 
I would think that a tank heated by DSH feeding the cold side of a tankless system wouldn't even kick on the tankless most of the year. Based on my experience.

For anyone looking for a unit this is the one I installed. It was a straight forward install and works well. Direct replacement for my 15 year old unit.
http://www.acoverstock.com/ecu-heat-recovery-unit.htm

I also have found my puny 40 gallon pre hot water tank is really too small to take advantage of the DSH. What I am doing right now is connecting the drain valve on the gas water heater via good hose to the drain valve on the DSH tank. When I open both valves and the DSH is running it tends to pull some water out of the gas water heater tank, heats it in the DSH and then dumps that back in the pre tank. This causes some water to leave the pre tank and run in to the main gas water heater tank slowly warming it up as well. I have found with this setup the DSH won’t shut off, just slowly get closer and closer to 150F in the pre tank with the main tank up about 130F.

The down side is if you leave the valves on and use a bunch of hot water, the cold tends to drop to the bottom of the pre tank, through the connecting hose and in to the main tank. I have been just opening and closing the valves manually when we aren't using a lot of water.

I have also had our regular gas heater off for almost a year now with a few exceptions when guest were over and using a lot of hot water for showers.

The obvious fix would be to get a 80+ gallon pre tank, like my HVAC guy suggested I do, but I already had the 40 gallon almost new electric tank, I should have listened.

I'm thinking I might go to 80 gals or more on Pre tank. The DSH seems to limited by how much water I have to heat. The more that goes in the tank the less heat the field has to deal with in hot dry weather. I'd like to make enough hot water to keep a hot tube hot without a heater. Those soaking tubs can put a big hurting on the old elec bill.

When the heat pump is running during the summer months, its extracting heat from the air in the house and expels this heat into the water ground loop, that heat can also be transferred into the hot water tank to preheat the hot water, there by saving energy by allowing the hot water tank use less energy to get the water hot. The effect only happens when the heat pump is on, thus when the system isn't cooling, its not pre-heating the hot water. So your suggesting using the water in the pool as a buffer for the hot water heater? I see two problems with this.

Unless your using the pool water in the same loop as the hot water heater, for drinking/cooking/washing water, it's not going to work. 

Now you could have a 2nd Heat pump unit with another desuperheater to heat the pool water seperate from the hot water desuperheater, but it's unlikely the system is going to cool long enough to really put much of a dent into the pool temperature. You be far better off getting heat gain from the sun than the heat pump.  I'm not really sure what your trying to accomplish with the pool, do you want the pool to help you keep the hot water hot, do you just want a warm pool, or you looking to use the pool in place of the heat sink / ground loop to bleed off the heat extracted from the house?

As for the water taking a long time to heat up, it would be far more effiecent to install Point of Service tankless water heaters where you use water the most.  A single whole house tankless water heater isn't going to give you the kind of benifits/savings you looking for.    

As TG said it depends on what you’re trying to do. If you have no real heat on the pool now or are reluctant to use the heater, then using the AC in the home and dumping the heat via a heat exchanger to the pool does work. Actually in our case, even being at 45* north in Green Bay, WI in summer I need more house cooling than I do pool / hot tub heating, but our pool / hot tub are indoors and well insulated. If the pool were outside it would likely warm it up a couple of degrees. You might as well dump the heat in a place you can use it.

Again if you intend to use the pool that was warmed up via geothermal, you could do that as well with another water to water heat exchanger or a hot water tank with a built in exchanger and just circulate the pool water through it. Although the warmest you would get would be the pool's water temp, which might be fine for a pre heat tank, but a DSH on the geo would be a much higher temp and likely offset more of your hot water needs. Maybe 3 tanks, the first one with a pool exchange, the second with a regular DSH and finally a traditional water heater of some sort.

It all depends on what you’re trying to accomplish in the end. As our HVAC guy says we can install whatever you want, how ever way you want, but will it be practical or have a pay back in the end?