I don't have any direct shooting experience with either but I like them both. I like going to gun shows just to see what's out there and pyisically handle the stuff instead of just reading about it. I've even worked a couple of shows for a dealer friend. You can learn a lot.
I've always wanted an M1 carbine and some day I'll get one. $500 is a pretty good price and accessories (including vintage surplus stocks) are readily available. I've always looked upon them as a "fun gun" but they certainly can be used for home defence, especially the folding stock models. That longer barrel will get the most out of what basically amounts to a revolver round.
I also like that Kel-Tec - the one that you spoke of with the larger folding stock and full foregrip. I'm not crazy about the one with the tubular type stock. I think the Kel is more versatile than the M1, and the company has come a long way from when it was known for producing little more than "Saturday Night Special" kind of guns.
Tough call. If it was my first rifle I'd probably go with the Kel-Tec.
(Insert random tough-guy quote here)
"See my gun?? Aren't you impressed?" - Anonymous sheepdog
Guns - the alternative to running for your life.