Feel free to use this diagram on your site as long as you link to Dreaming Green.
If you don't quite get that diagram, I'll try to explain. If you have a second story, you know how much hotter that gets than the bottom floor when you haven't been air-conditioning it in the summer. Well, imagine how hot it would get up in the top of your house, where there aren't any rooms, just insulation and such. That's never air-conditioned, so it would get even hotter! This is because warm air rises.
Well, instead of using a water heater for your water, you could install pipes up there, then have your water flow through it. The pipes will heat up, and, when no one is using the water, the water will just sit up there and heat up. Also, the water probably wouldn't cool down at night, since water keeps its temperature much better than air.
Now, we don't actually have this system installed, so I can't tell you every little detail, but I do think it could save you a lot of money. If you have a really large house, it would probably work even better, since there is more room for more water, and, the taller the house, the hotter it will get. But I would imagine this works in all houses. I'm guessing that if your family enjoys taking long, super hot showers, maybe you wouldn't want to throw out the hot water heater immediately after installing this, but, you might not need it as much!