Which functional specifications are most important in an audio interface?

Since your situation is guitar/MIDI keyboard and with a smaller budget, you can either: Go with the Line6 because it comes with guitar amp software and is very simple to use. Amp simulators and very basic input/controls. That's pretty much the only benefit I see. But if you have an amp for your guitar and pretty much want to stick with it (would invest in a mic at this point or use the amp's line-out to record the amp sound), then disregard this and, Buy the M-Track because it comes with two microphone and guitar/instrument inputs, MIDI In/Out, and has hardware inserts(so you can insert a hardware EQ, gate, or compressor if you happen to have/get one. The M-Track also has a lot more control, like a separate headphone volume control, mono/stereo switch, input monitor control (for latency-free input monitoring), and another separate knob for the main output volume. Simply put, you can record your guitar direct into the interface at the same time you record your amp output for 2 different sources, have a MIDI keyboard hooked up & ready, and be able to lower the speaker volume so that you can record quietly using headphones! To answer your original question, make sure your interface at least has: 24-bit recording for more headroom/volume resolution, and 44.1kHz sample rate for CD-quality clarity (higher for DVD, etc.) Preferably a way for zero-latency monitoring so you don't record off-beat & distract yourself. Combo XLR/TRS jacks preferably like these: [http://www.neutrik.com/en/xlr/combo-i-series/%5dNeutrik Combo Jackhttp://www.neutrik.com/en/xlr/combo-i-series/ but if not, then balanced XLR & 1/4" input jacks and use balanced cables to reduce noise. MIDI In/Out. Headphone jack w/separate control BALANCED outputs so that you don't get anymore hum going to your speakers. Another good thing to do is look at reviews to see how long the interface usually lasts, what problems you might come across, and how tough the build of it is (if you do recording on-the-go so it doesn't break easily). In fact, I use the Presonus AudioBox and it's great. No issues on my end.

You shouldn't have any significant problems with either as long as your expectations are in line with the price. Line6 and M-Audio both make good gear. M-Audio has more experience in the audio interface category, but Line6 has been doing digital pedals for a while now. The main difference is that M-Audio has more experience with drivers and the software side of things, which probably give them an advantage, but either should do fine. Neither is a high end rig, but unless you are really looking to get in to the studio space, either of them should do fine for starting out and getting your hands dirty with basic to intermediate recording.

Check the OS specifications and the connections. If the device isn't specified for your OS, you may not be able to make it work - period. If the device uses firewire or USB 3.0 and you don't have those connections, you may need to buy additional hardware or be out of luck. If you buy additional hardware, make sure that also matches your OS. It helps to know what OS you're using, and what DAW you are using as well. Usually you want to make sure the interface and DAW both support the same technologies - like AISO... but most semi-pro and pro do now-a-days.