I can't help you on picking the best gun, as others have
said there is a lot of personal preference as well as
situational demands that make it impossible to determine what
would be the best for you. Having said that I do have a
recommendation as far as ammo goes, if you decide on hunting
with the .22lr. You (as well as any small game hunter) owe
it to yourself to try the Winchester 40gr PP (X22LRPP I
believe). In my humble opinion it offers the best all-round
package, in my Marlin it is more accurrate, lower in price
and just as flat shooting (at my hunting ranges) as the
runner up in my gun, the CCI Mini-Mag. It really takes the
wind out of the squirrels sails without undo meat damage.

Upon reading Rednekhuntr's advice I am glad to see there is
someone else that shares my feelings on the ammo.
Good luck in your pursuit.
Chissel