Maybe I should have bought a tankless?

Right before my dad and I left on our road trip I noticed our water heater was leaking. At the time it was a slow drip that appeared to be coming from the drain valve. So I put a bowl under it and took off. Of coarse Grandma scared the crap out of me when she said someone in AZ had one launch like a rocket out of their house. When I returned home Scott went down to drain the tank and replace the valve only to discover the leak was coming from the tank. So I did some online research on water heaters and the possibility of solar or tankless. Solar could have cost about $5,000 and tankless about $1000 not including installation. I was told first time installation could be very costly. With the government rebates and energy saving costs we could have made up the extra money after a few years however, I am still unemployed and in times like these we could loose the house before recouping the money. So I decided to buy a Kenmore Energy Efficient tank and arranged for installation today. The tank was about $500 and installation $229.
The plumber shows up and points out all the code violations and worn piping. So I approved that new yellow tube, the green gas shut off valve and other piping. Once the system was hooked up the plumber discovered it was defective, and I had to call Sears for approval for the plumber to exchange. Later two other plumbers showed up at the door with another unit and were laughing because I had three plumbers and three water heaters in my living room. They said they have never seen this particular problem and maybe I had bad luck. (I often wonder). So after all the chaos I end up paying (charging) almost $900.

What next? Well I waited a couple of hours, took Millie on a nice walk and began to make an Easy Mac. When I turned on the hot water it was spitting and eventually ran out. I thought maybe the pipe was clogged with sediment so I tried other faucets throughout the house and nothing but a gas smell. I went down to the basement to look at and listen to the water heater. Nothing, so I tried turning the cold water valve and what do you know the tank started to fill with water and crazy, spooky noises came and I ran quickly upstairs to call Scott. The gas was on in the empty tank for three hours before I noticed and turned on the water.

I am so spooked about the whole gas thing and frustrated we had to spend so much money. At least this unit is top rated and warrantied to last 12 years. How annoying, I wonder in this economy if we would be better off renting?