Congratulations on trying to make your home as green as possible.

I'll address to the issue of tankless water heaters first. I know that these are growing in popularity but I don't have first hand experience with them. Consumer Reports did evaluate tankless water heaters and their review was not flattering. What I took away from that review was that tankless water heater manufacturers have made great claims, but actual performance is mixed. Also tankless water heaters are expensive. If you go this route, you'll want to go with a gas tankless water heater system. Forget about electric tankless water heaters.

There is also an excellent review of tankless water heaters by a plumber. It's called Tankless 101.  It's an interesting read and will help you if you elect to go tankless. Given the high costs I am not sure I would go with the tankless water heater. It may make more sense to buy a high efficiency hot water tank heater and combine it with the GFX discussed below.

The Hot water recovery system that I discussed has proven itself and been reviewed by the Department of Energy. It does make sense and even is more relevant if you have a larger family and take a lot of showers. What I like about it is that there are no moving parts and it works pretty well and any plumber can install it. Unless you are going to be living in an area where water is in short supply or expensive, I would not go with a grey water system. This is a retirement home and mainly for just the two of you. Besides, even if you did this, you would have to run the idea by local authorities to determine what you could use the grey water for.

If you are concerned with water conservation, then install some rain water barrels to collect rainwater and use that to water your flower and vegetable garden. Also consider installing a geoblock based gravel driveway instead of concrete or asphalt.

I would investigate solar thermal [PDF] though to heat your water. That would be a pretty awesome system when combined with GFX heat recovery and a very efficient water tank heater.

Feel free to provide more information. Tom