Brown Water?

I just spoke to the town Sewer department. Since we moved into the house three weeks ago, I've noticed that the water from some the taps is brown. Since the house was empty for nearly a year, I wasn't surprised that some sediment would have gathered. I hoped that the problem would resolve itself with time as any sediment present in the pipes flushed out. The woman at the Sewer department said that if the HOT water was brown, we may need a new hot water heater. Another item to research: What is the most energy efficient system? I am intrigued by tankless heaters.