We have a 4,000 foot, 2-story, 1984 Deck house. It has vaulted ceilings, lots of south-facing glass, wallboard heat and five heated zones. We live in southern Connecticut. The original Utica oil-fired boiler is shot. It has our hot water supply incorporated into it.
I am contemplating switching to propane for several reasons. It is greener. I can add a high efficiency heater in the garage (my wood shop) and switch to a gas stove, which I prefer. I have read that gas boilers can be 87% efficient. In the summer, would a separate gas water heater be more efficient? Fine wood dust in the garage might be an issue. A forced air hot water radiator might be safer...
Another option would be to supplement a new boiler and baseboard heat with a high efficiency furnace and add it to the existing central A/C that supplies the first floor from ducts in the floor, from the basement. There is no A/C on the second floor.
I know oil is cheaper and burns hotter than gas, but my limited five years of experience with boilers and oil is that it is dirty and every time you run out of oil (or get very low) you run the risk of clogging the filter on the pump with sludge and losing heat. This happened recently, even though there was an in-line oil filter! This happened frequently with our old house. They seem to require a maintenance contract because they require regular cleaning and servicing. Also, gas furnaces can be 97% efficient.
I'm used to gas or electric furnaces and forced air heat... Some say baseboard heat is the most comfortable and best way to go for all the heat. I wonder if the options I am considering are really worth considering? Since my experience is limited with oil-fired boilers and this is a new house (for us) I would welcome opinions on this.

The new oil furnaces are very clean burning. A 90+% furnace can be of a sealed combustion design so dust won't be an issue. Ellectric is very green, and outside of the blower would not be bothered by dust, but expensive to operate. On demand water heaters are very economical to operate and very green.

The only dust will be in the garage where I have the woodshop. I have a dust collection system installed but there will still be some fine dust from sanding until I address that issue with an air scrubber or a sanding bench with collector.
The boiler is in the basement.
I do not want to consider electric because of the exorbitant cost in our area..
A Propane powered boiler seems capable of being more efficient (a higher AFUE) than oil. I am interested in a top brand boiler. The one quote I have received so far, is for an oil-fired Peerless WV-5 with 208 net MBH and AFUE of only 84.3. Peerless boiler WBV-5. This seems to take either Beckett, Carlin or Riello burners. They are quoting a hot water supply added onto this unit.
Are there more efficient boilers with energy star ratings and higher AFUEs? The Peerless Pinnacle PI-199 that is gas-fired has a seasonal AFUE of 92%. I can't tell whether you can add hot water supply with this model or not...
When you say "On demand water heaters are very economical to operate and very green." are you referring to a "whole house" (electric?) unit that would reside in the basement or point-of-use types for every location? For us, that would require five units and I've read that they cannot always go right under the counter.

Peerless boilers are made by Munchkin and they are only as good as the installer. That goes for any equiptment. If it is not installed correctly it will be trouble from the start. All boilers are capable of having a hot water tank installed to supply you with hot water. They just use a separate tank and valve for the water heater zone. Around here propane is more expensive that oil and oil will give you about 2o% more heat value per gallon dependinbg upon the setup.

When I look at costs in my area and compare a (approximate) maximum 85% efficiency for a new oil-fired boiler to a possible 95% efficiency Propane-fired boiler I come up with a 10% difference which equals about $300-400/year more for the Propane gas usage.
I will save about $50/yr. on electricity when I get a gas stove and oven, which I need to replace anyway. I cook a lot!
I know our service contract to maintain the oil fired boiler is about $250/yr. and there are some savings from not using all the small propane bottles on the grill. We won't have a heavy truck coming down our driveway as often, either. Given all this it seems a wash.
Yes, there are some initial outlays for putting a Propane storage tank in the ground but I plan on doing all the rest of the installation myself. (I know I need to pressure test the whole system before I use it, too.) There are some initial tax incentives for using propane which can offset installation costs. I don't know if there are other benefits... other than it is greener-related to emissions into the air.

Can you think of any negatives? Can you think of anything else I should consider doing if I switch to gas? I am considering whether to have a separate hot water heater or have a separate zone and hot water holding tank rather than a tankless water supply on the boiler. I could add a zone and install a hydro-air coil in the A/C air handler. This might be silly since the radiant baseboard heat works so well.

Let the propane company do the pressure test. Around here the tanks are supplied by the propane company at a very cheap rental per year. 15.00 actually. Get your permits and get an inspection for your safety