Yes, they’re big and scary, but when you actually look at what’s hooked up, they’re really not very complicated.  I’ve replaced dozens and don’t ever recall any particular problem outside of what’s mentioned below.

Pilot Light

The most common problem is the pilot light not staying lit.  This can be one of three things:

If it stays lit for a while, then suddenly goes out, it probably just needs to be turned up a tad.  There should be a small, round cover that you remove with a slotted screwdriver, then you’ll see the adjustment screw.

If it won’t light at all, then it’s either the thermocouple or the valve:

The thermocouple is what tells the valve the pilot light is lit.  That keeps the gas from going on if it’s not.  The head of the thermocouple will be right around the pilot flame, then the small copper tube will run to the valve.  Since they’re much easier and cheaper to replace than a valve, that’s the first thing to try.  Replacement is no big deal.  Be sure to bring the old one with you to the store as there are various types and lengths.

If it still won’t light, it has to be the valve.  They’re fairly pricey, so you’ll have to judge whether it’s worth it to replace, or just replace the whole heater.  Valve replacement is fairly straightforward.  Drain the tank, remove anything attached to the present valve, grab it with the monster Channellocks and unscrew it.  Put teflon tape around the new pipe thread and twist it in.  Reattach everything and that should do it.

Heater Replacement

As far as replacing the entire heater, it’s not that big a deal.  The supply lines are bendable, so there’s no worry that the pipes on the new heater will have to be in exactly the same position.  The only real hassles will be draining it and getting rid of the carcass.  Sometimes they’re so corroded inside they won’t drain, at which point you’ll need an appliance handcart just to move it.  Once you get it outside, you can tip it over and let it drain from the top.

As for disposal, some dumps won’t take appliances so call ahead.  In lieu of that, ask a friend who runs a store, or a friendly store owner, if you can use their dumpster.  And there’s usually some junk collector around who will pick up anything for a price.