Yes, it's a separate water heater (30gal) in a closed loop system. It seems that the cost went down noticeably, yes - and I agree, floor insulation should make a huge difference, more so than with forced air heating.
I am noticing this in my gas/electric bill, too. The two are combined, and for some reason PG&E won't show me my electric usage over time, but assuming that that's been roughly equal, I'm saving between 20 and 50 bucks a month, which would put the payback period for the heating system at about 5-6 years - pretty good if you ask me.
I've insulated part of the floor now, and the difference in feel is noticeable. The colder areas of the floor in between the heating loops are now noticeably warmer, and I've had to close the valves for those zones a bit, because it was getting too warm in the insulated areas. I hope to get most of the rest of the insulation installed next weekend, at which point I'll likely need to lower the water temperature a bit, too.
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