One thing a tankless heater does that a tanked heater does (gas or electric) is vary the amount of input heat. This is how the units adjust the temperature when you tweak it on the remote control. If you are taking a straight hot-water shower with the 'stat at 100 degrees, you are flowing lots of hot water through the heater, but the flame, or electrical element is running on a lower setting. This also gives you extra capacity for multiple people to take showers, because if another shower or faucet is turned on, the only thing necessary to maintain the temperature is for the heater to increase the amount of heat applied to maintain the equalibrium at the set temperature. The user of the first shower may feel a slight, momentary cooler change in temp until the heater re-adjusts itself.
Now, if you set the water heater to 140 degrees, and then the shower user adds cold water for a comfortable temp, you are subsequently flowing less hot water, but the flame (or heating element) is running at a higher rate. Although this method would also allow multiple users to operate showers at the same time, if another shower or faucet IS turned on, the 140 degree temperature won't be held...the user of the first shower will get a blast of cooler water, and would be required to adjust the cold water valve to re-balance the mix (just like in an old tanked system)
I would say that you get the most energy savings by using the lower temperature and running straight hot water because less fuel will be used when the shower is operated...and it would make the system more hospitable for multiple users.