The P1i is BASED on the M600i. They fixed a lot of things: the M600i was notorious for its poor performance, so they bumped up the memory.
There really is only one reason to buy it instead of the P1i: price. If you can get the M600i for R1000 (on prepaid, no strings attached), that's quite a bargain, but don't expect too much from it.
The M600i is end-of-life, so don't expect much in terms of software updates. Also, if you have a Mac, some people have reported problems with synchronising the phone with their computer. If this is important to you, look elsewhere.
Regarding the keypad, the two-sided buttons are a hassle to get used to, but once you do, they aren't too bad. I often use a friend's P1i, and they really could have done worse (W950i)