Jim B
Favorite Answer
You can get fiberglass blanket insulation at building supply stores like Home Depot and Lowes that is sized for water heater tanks and has a white plastic outer layer for appearance and to protect the insulation from damage. Many municipal electric companies will insulate water heaters for free or at a discount as well as install some flourescent light bulbs for free.
Tom
The tank should already be insulated, but a little more probably wouldn't hurt. You are probably going to end up with blanket insulation normally available at any hardware or heating store. That is the fiberglass with a reflective material on one side.
Dirt
Lowes/Home Depot/Ace
They are just fiberglass wrap you put around your hot-water heater (very similar to insulation used in walls in homes).
They effects of this extra insulation is pretty negligible, especially on newer water heaters. However, if you really want to "go green", you should lower your water heater's thermostat. Or better yet, switch to a tank-less water heater. see below for a link to one brand.
blondie
try hardware store, lowes, homedepot. the blanket works 4 me