Why would my hot water heater pop and bang when we turn the hot water on, just at first and goes away until you turn it off and back on again. Please note that we have lived here for 3 years and it has just started. Do I have the water temp too high causing it to pop inside.

How old is the heater? Is it gas or electric?

Are your faucets fast acting valves, i.e.. Single lever type. These require an air chamber or bumper to cushion the rapid change in water pressure. The rapid change in pressure can cause the pipe to vibrate or bang against the surfaces to which they are mounted. The air chambers are often just short lengths of vertical pipe in the wall at each faucet. Over time the air in the chambers can be absorbed by the water and they no long cushion the water pressure. To restore the air in the chambers turn off the water to the house and open all faucets to drain all the water out of the pipes. Because the air chamber have no vent to let air in, the water in the chamber can be held by vacuum for some time. The longer you can leave the system open the better, up to several hours. As a precaution turn you water heater off. Once air has refilled the air chambers your banging should go away.

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Why would my hot water heater pop and bang when we turn the hot water on, just at first and goes away until you turn it off and back on again

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Since you didn't say, I'm going to assune that you have a gas hot water heater that you do not flush on a regular maintenance schedule. Here's what's going on. If you do not flush,(not drain) your heater on a regular basis it will build up mineral on the bottom of the tank. When the flame comes on it turns the water trapped under the mineral to steam and the steam escaping is what you hear. Let me show you how to flush your heater. Attach a hose to the boiler drain at the bottom of the tank. With the pressure on, open the boiler drain and let it run until the water runs clear. You will see a spurt of red,(rust) and some white grains,(lime or calcium carbonate). The whole thing shouldn't take more then a few minutes. Don't forget to flush it out every month. Your heater will thank you for it. You might want to consider cleaning the screens on your areators if you have a high mineral buildup. If thev problem still persists after you have flushed, you will have to drain the heater, remove the boiler drain and go up in the bottom of the tank with a wood or plastic rod, (not metal) and try to break up the mineral and flush it out. Good luck Tom