With water heaters you get what you pay for. Getting a cheap water heater or poor installation can be a disaster. I have been to several homes where the water heater sprang leaks which not only meant replacing the water heater prematurely, but where the water damage was extensive causing the replacement of carpet, drywall but also resulted in huge water bills as some
of these people had been out of state for the summer when their water heater exploded. I highly recommend a quality water heater with a good energy rating, with a high enough capacity for your whole family's water usage and that it be installed by a quality professional company that will be around long enough to cover any warranty issues.
Hire a Professional
In the remodeling business we refer to the cost of hiring a quality licensed plumber (as opposed to a fly-by-night) as insurance. Meaning that you pay for what you get and that what you really need is the security of knowing that your work is under a warranty that you can actually collect on if necessary.