Undergraduate seeking advice about future career and working relationship with PI I am currently a second year undergraduate student at a public university in the US working in a lab run by a successful new PI who is on tenure track and is currently in their 3rd year at this university. I started working in this lab my first month of undergraduate, and have continued working ever since. 

I am uncertain of whether or not I am cut out for research and feel like my time and skills are being taken advantage of. I was also wondering if I should continue to work here.

I'll briefly outline some examples below to make the situation clearer:


As a freshman, I was uncertain about course selection and I asked my PI for advice where I was told to take Class B over Class A. In hindsight, by taking Class A, I could have saved a year but now have to stay one more to get my degree. 
I have been working a lot during the semester, between 40-80 hours/week. I spend the time on my own volition because I enjoy the work I do and learn a lot while keeping up with my coursework. However, my PI expresses disappointment when I don't keep up the same time commitment during weeks with midterms for instance, and I feel guilty that I can't do as much.
One stipulation that my PI gave me was that if I work for the lab for 2 summers, I would be given a recommendation and be able to do research with my PI's old advisor during the summer instead of a traditional REU or internship. My PI's postdoc advisor is very well known in the field and is also at a prestigious institution. I am unsure about the best way to ask for compensation during breaks such as summer for instance, and I am not being fully compensated compared to traditional REU students due to "lack of funding" or "investments already being made" in my research. 
I have expressed doing REU's or internships instead of staying at my institution doing research with my PI, but when I ask for a recommendation letter the topic quickly changes, or my PI asks me to write it myself. To my surprise, my PI writes recommendation letters for other undergraduates in the lab applying to graduate school.
For the past year I was working on a project in which I was able to give a talk and two poster presentations at 2 large international society meetings. Ultimately, I was placed on another project and my old one was left to be determined and I'm left wondering where these projects would go. My PI has 2 PhD students, but they are also in their 3rd year and have not published at all yet. I am also wondering if I have to wait for them first before I can send my material off for publication. 


I am conflicted at this point since I enjoy my research and it is in the field I would like to do my graduate studies in. I would like to have some compensation to cover at least housing or otherwise do an REU instead, however, most REU deadlines have passed. For clarification, I want a strong recommendation for wherever I apply, but it seems like it has to be on my PI's terms, in that I am being strongly pushed into working here instead of somewhere else.
Your question could be edited to be more concise (it reads a little bit like a rant at the moment), but here are some responses to your points:


"I asked my PI for advice where I was told to take Class B over Class A" - You asked your PI for advice, and he gave you his/her advice. It is your fault for not making sure that the course doesn't cause problems for your schedule. Your institution likely has some sort of "academic advising" service for these types of degree scheduling things, and your PI likely does not know all of the intricacies of your undergraduate program. This is a learning experience for you, but it's important to remember that it's up to you to take charge of your education.
"I have been working a lot during the semester, between 40-80 hours/week." - I'm not sure how you're working 40-80 hours a week while still completing all of your undergraduate courses. Can you maybe clarify this? But that much time seems fairly high for an undergraduate student with a full course load.
"I am not being fully compensated due to "lack of funding" or "investments already being made" in my research" - This is up to your judgement. There are some professors who will take advantage of undergraduate students (many are not paid at all), but there is also very likely limited money budgeted for undergraduate students. It's impossible for us to tell what's going on, but it's up to you to decide if it's worth it, and if you should maybe try to become involved in a different lab at your institution.
"when I ask for a recommendation letter the topic quickly changes, or my PI asks me to write it myself. To my surprise, my PI writes recommendation letters for other undergraduates in the lab applying to graduate school." - Many professors will have the student write a letter of reference, even for students applying for grad school, so this is not unusual. That being said, reference letters for grad school are arguably more important than letters for summer positions, so it would make sense that he/she would put more effort into a grad school letter. But even if you write the letter, your PI should still be editing it and making it their own.
"Ultimately, I was placed on another project and my old one was left to be determined." - It's not uncommon for projects to be put aside while there are other more important projects on the go, and it's possible the PI's current funding does not cover those projects. Again, we don't know the situation, so maybe you should try discussing this more with your PI, and ask more specific questions about what kind of data he wants and what it would take to finish them.
"Ultimately, I want a strong recommendation for wherever I apply, but it seems like it has to be on my PI's terms, and I feel stuck." - I don't really understand why you feel stuck and why it's on your PI's terms. It sounds like you've already gained a lot of experience presenting your work, and that will help make a recommendation letter strong, especially for a second year undergraduate student. Now if he is refusing to write you a letter because he wants you to work in his lab, that's a different story. And by writing you a reference letter, that includes you writing it, and him/her editing it.