as far as putting a kit on a non-legal bike, I don't think there's a whole lot of difference. The KTM's may be a little easier, since I think they come with a title that doesn't state 'FOR OFFROAD USE ONLY'.

It really depends on what you want the bike to be good at. I think the optimum is a 450 4-stroke, maybe a 400 cc (Suzuki DRZ) if you're not going to do trails at high speed.

More displacement above the 450's generally means more weight, which means more stable on the road, but tougher to handle in tight trails.