You have to clarify for us whether you want a humidifier installed at your furnace (called a "whole house humidifier" or an "in duct humidifier"), or whether you want a portable "console" humidifier which you can carry from room to room, and which you will have to refill with water. I myself have an Aprilaire in-duct humidifier - absolutely love it (I used to have a portable console humidifier--never again--a PITA, although they do work). But for an in-duct version, you do need to have an incoming water and water drainage at the furnace area. The portable ones are inexpensive--depending on size, approx. $50-100. But they do need to be refilled, they do gurgle, bubble and hum, and some types get a residue that needs to be cleaned very often. If you get a portable one, try to get one with the biggest water tanks manageable--otherwise you'll be refilling every 12 hours or less. Check out the Consumer Reports article which describes different types of humidifiers. Also, a better forum to pose your question is the Gardenweb's Heating & A/C Forum.

I used hot water supplied to my Aprilaire 760 to increase the evaporation rate on my 2-stage gas furnace. I ended up doing this to assist the unit to adjust to the sudden humidity requirements I saw on occasion when my furnace rarely went out of first stage. With regards to going tankless/on-demand, depending on model and size, it takes .4-.6 GPM to activate the burner which is well above what a humidifer uses/demands. Not that it will be a problem but the warm water will only be supplied to the humidifier when another fixture is requiring hot water.- Thus no short cycling will ever happen due to your humidifier.

Steam is the only way to go. It will not leave that white residue that non steam units do, and because they actually boil the water, they are much more sanitary inside. I just replaced my EWC 110 volt steam humidifier with a 220 volt skuttle steam humidifiier in my personal house. What part of the country do you live in? I STRONGLY suggest that you make sure you spec and install a 220 volt unit. Even in Southern California, the performance of the 110 volt (12kw) unit was dissapointing. The unit could run for hours and never satisfy the humidistat and shut off. Since changing the unit to the higher steam output 220 volt model, the performance has improved incredibly. Unlike A/C, oversizing the steam humidifier is a good thing (within reason). For what it's worth, both the EWC and the Skuttle both drain off the water to prevent junk from growing inside. The EWC drains completely after use and the water has cooled to below 140 degrees. The Skuttle has a programmable timer that opens the drain valve for 10, 20 or 30 seconds every 30 minutes depending how it is set. Both brands will turn the furnace blower on independantly of the thermostat to humidify the house if needed. You have to remember to shut down the unit for the summer because you dont need it runing during cooling season - it will put extra load on the A/C I had a lot of problems with my EWC steam unit and can not personally reccommend it. The Skuttle that replaced it is a lot simpler of a unit and has given me NO problems. I ended up buying my Skuttle brand new in the box on eBay. Make sure you get a good digital humidiatat with an outdoor temperaure sensor that adjusts the indoor humidity based on the OSA temp. www.ewccontrols.com or www.skuttle.com

The flow-through type will also 'gunk' up; most likely calcium deposits, but other types including the Honeywell steam variety require periodic internal cleaning, etc. If your new furnace is being downsized compared to your present model, or 2 stage, multi-stage, modulating, and will run mostly at lower blower speed, you need to have your contractor assure you that there will be sufficient air flow, if a bypass type is considered. They steal air from the supply. In such a case, a fan-powered unit will work. An accurate heat calc is essential. An IAQ will control all of them. V