I have a 15 year old "State" water heater. Attached is a small container by its side called "Waterguard". What is the purpose of that ? It's beginning to leak. Can I replace just that part or do I have to replace the whole heating unit ?

A state water heater is designed to heat your domestic water. A water guard is a device to protect the area of the heater from flooding. I would call a plumber under these circumstances and see what the failure is about.