I have heard rumors that a tankless water system will cause the water pressure in the house to drop noticeably. Do you have any information on this?

yes it can (i have one) but for us only on high demand (tub) that is has a problem. the more gallons per miniute the less it will be.we dont even notice a change on all the other taps.and you can not (unless you get a high demand) run more than one thing at once. But to have a never ending shower and never runing out of hot water is priceless we also save a lot on our power bill. I have a electric 2.5gpm electric and 3 people in a small house. i would never swich back to a tank again.