Teddy-
I have a Kel-Tek .32 auto, and have put about 250 - 275 rounds thru it.  It has jammed 3 times, all with HP bullets, none with FMJ.  So in answer to question #1, what do you think?  The guns size makes it a good hide out gun, and its sights and handeling / grip make it a good "get off me" gun, but limit it's abilities in any kind of serious firefight.  There are better rounds then the .32 for self defense, but a magazine full of .32's in the hands of someone who knows how to shoot shouldn't be sneezed at.  The main selling point for the Kel-Tek, and the similar Ruger as well is ultra compact size.  Heck, I can put mine in my tall socks and carry it that way, if I want.  The most compact reliable (as in hundreds and hundreds of rounds without issue) auto pistol is what I usually carry, and thats the Glock Ultra compact 9mm.  11 rounds, accurate, and goes bang every time.  Of course the Glock is also considerably larger then the Kel-Tek.  Heck, the Kel-Tek is only 8 ounces....  Now I have heard a lot of good about the Kahr's, but have never owned one.  They seem to fall in between the Kel and Glock in size.   The most important factors in a defensive hand gun is, I believe, reliability, as well as the ability of the shooter to act quickly, with confidence.  That means training and practice..
Larry