How should I install a new water heater?
Since you talk about venting, I'm going to assume you're talking about a gas-fired water heater. First thing you should know is that in many jurisdictions, gas pipe fitting may only be performed by licensed gas fitters. Based on that and the fact that you are asking these types of questions leads me to believe you are probably out of your depth on installing a gas-fired water heater.

Instead, I would strongly consider an electric water heater. Installation considerations are much simpler.

And don't forget that you have to follow earthquake code, in additional to all of the other usual codes (electrical, plumbing, etc.)!