What I was trying to say is that on demand hot water heaters get there effiency by not having to continously heat a tank like a conventional hot water heater. But in effect, at least with your original idea, you have added back the tank so the on demand system is no longer more effecient than that of the stadard hot water heater, maybe even less so do to the difference in heat transfer through a marginal heat conductor (pvc, etc). If your going to go with a closed loop system, you might just as well use a standard hot water heater set on low with a small tank.
An open loop system were you are actually supplying the tank with hot water would be a different scenario and its effiency would be determined by how often it cycled on and off. Can the output temp of an on demand heater be regulated?
I keep envisioning your tank using a liner, and I now recall that is not going to be the case. If it did, I think two water bed heaters installed under the liner would be the way to go, giving you a much larger heating surface. The drawback would be maintence.............