[jeff5may]

The heat exchanger boils down to a time and temperature model, one mass against the other. Water has much higher heat capacity and mass than refrigerant, so less of it (mass) needs to flow than the refrigerant per unit of time. With a coaxial hx, you can make the space between the tubes small, so the gas can flow through the middle. However, this reduces the surface area of water that is exposed to heat transfer.

The main advantage with gas in the center is cost reduction. Since the water is under much less pressure, the outer tube can be made of much less expensive material. PVC or pex is common, as well as cast iron.

With the water flowing through the center, both tubes must be made tough enough to withstand the pressure of the refrigerant. In this type of hx, the refrigerant can leak out to atmosphere or into the water line, so most are made with double walls to prevent an overpressure condition in the water line.