I have one (9mm S2K) and have been really happy with it. It's a really handy utility rifle for anything within 100 yards. The cheapo peep sights are actually quite effective for anything within that range. I'm a mediocre shot, and peppering a 6"x6" steel plate at 100yds is a cinch with mine. It has been 100% reliable with Glock mags. Avoid the Korean aftermarket mags...using them has left a handful of scars on my ejection port.
The only negative: The blowback design results in a filthy rifle...even after just a couple mags (this also applies to the Hi-Point). I wouldn't even try running more than 200 rounds without a thorough cleaning.
I prefer the Kel-Tec to the Hi-Point, due to the lighter weight and folding feature. The Hi-Point just has an awkward, top-heavy feel to it, much like their pistols. But most owners are quite happy with both of these budget utility rifles.
For varmints- A 9mm/40sw might work just fine, but I'd probably prefer a faster and more precise rifle cartridge. An AR-15 or other 223 is pretty versatile, and on the cheap I'd look into a 17HMR.