Tony,
Here's a good pictorial from San Diego.
http://www.sandiego.gov/development-...etin/ib207.pdf
Not all metal straps have to fully encircle the water heater. I think it depends on the strap design and the location of the supporting studs.
As for nylon straps, I've heard of them but never seen any (we shake up here too). I have seen a couple of sites that mention that the strapping is "required" to be metal but neither quote any code. One site mentioned the possibility of nylon strapping melting in a fie, but it would seem you already have a major problem if that occurs. You probably need to check with your AHJ to see if nylon is acceptable, and then with the manufacturer for installation instructions.
Failing that, use your noggin. Would the water heater be able to move significantly or not with the current straps and attachment points?