I've been running one for a bit over two years. The biggest problem I have encountered is that most of the plumbers in the area don't understand them, or know how to deal with them. My set-up includes the original tank heater, and a 6.8gpm Takagi tankless. I finally have it working the way I think it should, after three goes with the plumbers.
In my system, I have the tank turned on in "vacation" mode, putting out about 60-70* water. That water goes to the tankless and from there to the house at 122*. Additionally, I have a recirculation pump hooked up that recycles the water in the hot lines based on a clock timer (mine runs every half hour from 6am to 11pm).
These units work based on the rise needed to produce the water temp you have set for output. As long as they are working, they will never put out a water temp less than or more than that. What changes based on the incoming tempature is the flow. The colder the water coming in is, the less of it that the unit can heat each minute. This is why we turned the tank back on to "preheat" the water just enough to get the full benifits of our system in the winter months.
As for cold water in the pipes when you call for it, Yeah? WTH, it's been sitting there in the pipe getting cold since the last time you used it no matter what kind of heating source you have. Recirc systems are easy with a tank, a tad more complicated with a tankless, but certianly do-able.
As I stated above, I truely believe most of the bad press comes from plumbers who don't understand these units and either bad mouth them to keep from having to deal with them, or install them in such a way as to not take full advantage of them, leading the end user to complain about a unit that doesn't do "what it was promised to do".
On a final note, after all my research (2 years ago), I would personally not buy anything other than a Takagi or a Renai(sp).
Look for an email from me.