They do exactly what the name suggests - provide your heated water when you need it. This is just one of the great things about on demand hot water heaters, but it is one worth talking about.
By applying heat to the water as it comes into your home, instant hot water heaters can provide you with as much piping hot water whenever you ask for it (by turning on the faucet or switching on the dishwasher).
Some of the advantages of getting rid of the water tank are obvious - think about all that space you will recover for storage or whatever. Tankless waterheaters are usually very small and most are fixed to the wall, out of harms way.
They also save money in the long run, since on demand water heaters do not need to keep a huge reserve of water heated.
Some people have been put off going tankless since they do not want the hassle of gas canisters, oil tanks, or bringing in natural gas. However the best electric tankless hot water heaters now offer fine performance, and are well worth looking into.