I bought one of these for my sister as a birthday gift. She's not particularly interested in pistol shooting, and thus not especially good at it, but needed something for home defense. I got the Kel-Tec used for $209. It uses Beretta 92 mags. It does indeed have a high "neat-o" factor, and wowed the guys I work with (not too hard, though, since I work for a black powder gun company).
Sis and I took the Kel-Tec and 250 rounds of 9mm out to my gun club and set up some DEA-type silhouettes at 10 yards (about the longest distance she's have in or around her home). After a brief instructional period on the gun's operation, she was popping full mags into the target's center without any difficulty. Rapid-fire 5-shot groups hovered around 4" in her inexperienced hands.
Since we were alone on the range, we decided to do some more dynamic drills. I had her shooting on the move from 3 to 7 yards and engaging multiple targets after a few minutes, and the little carbine again did well for her.
The carbine was reliable, with no malfunctions in 250 rounds, except for one failure to fully chamber. This was a grungy lead-bullet reload that also wouldn't chamber in a CZ75ZB I had with me. Not the Kel-Tec's fault. PMC ball and Federal Hydra-Shok worked fine, as did the remainder (49) of the grungy reloads.
Couple of things I noticed:
Mag changes are more awkward than with a pistol. Mag release is in the Browning position, but the "Cooper flip" is more difficult to accomplish on a gun with a stock.
No bolt-hold open, as has already been mentioned. This obviously means you have to cycle the gun if you've shot it empty. The operating handle is awkwardly placed for this, and the recoil spring is fairly stout. Sis was able to run the gun fairly well, but will need much more practice to achieve any kind of fluidity.
The trigger pull is really spongy, but sis had no trouble doing quick Mozambiques at seven and ten yards. All head shots connected and were well-centered.
The cross-bolt safety took some practice, and will probably never be as fast as, say, an AR15 selector.
As was mentioned, the sights are high above the bore axis, much like an AR-type rifle. This can cause some POA/POI problems at close range for precise shooting. The idea of doing a hostage rescue shot with the Kel-Tec seems a bit farfetched...but anything is possible.
The carbine comes with a little key that allows you to lock it in the folded position to prevent unauthorized use. It's difficult enough to operate that sis and I decided she'd be better off with a cable lock.
Looking at the Kel-Tec manual, a ballistics chart in the back shows the 9mm giving velocity/energy figures basically equivalent to a .357 magnum revolver. I think this is sufficient for home defense, with the usual caveats about penetration. I'd pass on the .40 and get a 9mm, purely because 9mm practice ammo is cheaper than .40.
As an educational experience, after we'd fired all the 9mm ammo, I let sis take on another DEA target with my Commander .45. Results: groups three times the size of her hits with the Kel-Tec, and much, much slower. Conclusion: the carbine's a pretty fair substitute for a pistol for people who can't or won't learn to use a handgun well. Probably easier to use under stress than a handgun for just about anybody, too.
Mike