I would personally suggest the “raw” texture mode. That’s what I tend to use, because it means the Panda textures will match the Blender representation closely. I don’t have a lot of experience with the “simple” mode.
As for which model to use: Lambert for diffuse, and CookTorr for specular (which isn’t actually CookTorr, mind you - the Blender specular models are seriously mislabeled) should match the default Panda shading model best.