Oil hot water heaters are used by many households, and more often than not the basic system is based around a tank. The oil keeps this nice and hot for when you want to use it.
This is all well and good - if it works who are we to complain? But there is a lot of talk of instant hot water heaters these days. The big advantage is that you only pay for heating the water you use, rather than paying for eighty gallons to be kept on standby.
Normally attention is focussed on the natural gas tankless water heater, but the lack of natural gas supplies in many areas makes this a non-option. Of course liquid petroleum gas can be used, buy this often works out more expensive that kerosene.
Given residential heating oil prices, most consumers have a vested interest in saving fuel, so looking into more efficient uses of your oil is always worthwhile.
Tankless waterheaters can be combined with your heating needs in a so called combi-boiler. Again, this is a technology developed for gas, but it has been made to work with oil. The technology is still in its youth however, so you should have a talk with your dealer and do some independent research before committing yourself. But how nice it would be to have hot water instantly and your heating needs taken care of in one easy unit!