In order:
1. There are TWO P-38 pistols: The 1930's to 1945 steel framed guns, and the POST-WAR aluminum framed guns.
Speaking ONLY of the POST-WAR aluminum framed Walther's, there is NO difference between the P-38 and the P-1.
The P-38 was intended for use by West German police, foreign military sales, and commercial sales all over the world.
The P-1 was nothing more than the P-38 as made for issue by the West German military, who designated it as the "P-1".
The sole difference were the markings applied to the guns.
This is similar to the US military issue Model 1911-A1, and the commercial Colt Government Model.....same gun, just one marked for GI issue, the other for commercial sales.
2. Since they are exactly the same gun, made on the same production lines, the choice comes down to condition, and whatever value you place on having commercial markings on the gun.
"Usually" the P-38 marked guns have a better chance of being in good condition, having not seen as hard of use.
Many of the military issue P-1's were practically brand new, but a good many were used, rebuilt guns, and some were actually parts guns made up from worn out guns.
These are usually ID'd by having multiple rebuild marks and "X-ed" out serial numbers.
Choice comes down to actual condition and your personal preference on markings.
3. The Walther was designed to be a military-police pistol. As such it HAD to be as reliable and durable as possible, and accuracy needed to be adequate for combat distances.
The Walther was never intended to be a target pistol. Actual accuracy depends on the individual pistol, the ammo, and the shooter.
Where there have been reports of Walther's breaking, these tend to be confined to the P-1's that were heavily used, or to guns in which the new owner has been shooting hot loaded ammo.
The two most common facts that turn up on a broken P-1 are the use of hot ammo, and in cases where the owner has replaced the factory-stock recoil springs with "extra power" springs, in the belief that this is somehow needed.
One P-1 that I saw that had a broken frame was actually broken through the take-down lever hole, by the slide slamming SHUT.
The extra power springs, and hotter ammo literally hammered the front of the frame forward until it broke.
In later Walther P-38's and P-1's, Walther installed a hex-shaped pin through the frame.
The actual purpose was to provide a hard steel "wear seat" for the locking block.
Heavily used guns would wear the softer aluminum locking block ramp until the gun developed locking problems.
The steel pin provided a hard surface for the block to slide over.
This pin also reinforced the frame, to prevent cracking.
If you intend to shoot a LOT of ammo, you might want to buy a Walther with the reinforcement pin.
If you intend to shoot a normal amount of ammo, it's unlikely you'll ever need the extra strength of the pin.
4. The Walther P-38/P-1 is possibly the easiest, fastest auto pistol there is to strip.
You can literally field strip it faster than you can describe it, and the average person can do it in less than 10 seconds.
Here's a link to a Walther owner's manual with all the detains:
http://www.stevespages.com/page7b.htm
5. Double action trigger is heavy, and somewhat "stagey", single action has some creep and over-travel.
Remember, this is the FIRST double action service pistol ever designed, and it was intended as a service pistol, not a target pistol.
Due to the Walther design, there is little that can be done to improve the trigger, since spring kits very often cause reliability problems.
Again, this is a service pistol, and like most service pistols, the trigger was intended to work and be safe under all conditions.
6. Sights are very good.
The rear is a square notch, the front is a Patridge blade.
On many P-1's and P-38's there are "Von Stavenhagen" type white dots on the front sight, a white bar on the rear.
The rear sight IS NOT windage adjustable. The rear sight and the slide top cover interlock and hold each other in position.
DO NOT attempt to drive the rear sight over to correct windage, since this will seriously damage the sight, top cover, and possible the slide.
Any needed adjustments are done to the front sight.
If needed, you can buy higher or lower front sights at:
http://www.carlwalther.com/page2.htm
For your stated purposes, a P-38-P-1 will serve quite well.
They're a fun gun to shoot, reasonably accurate, quite reliable with ammo they're designed to work with, and if you test various ammo to find a brand that works, you can usually shoot defense ammo reliably.
To top it off, the P-1 marked guns are today's "best buy" in a pistol.
Walther P-38 pistols were selling for $500 and UP before the current wave of P-1's arrived, and as soon as they are sold off by the distributors, the price will again begin to rise.
These were top-of-the-line guns made by Europe's premier gun maker, and are extremely under-priced for the high quality and value.
This is similar to being able to buy a like-new Colt 1911-A1 government issue .45 for $300.00.