HD2 for the picture size. Colorspace is pretty much a toss up if you arent putting a meter to the screen. You could set the range to the video propper 16-235 on both the set and the vid drivers, or you could do the pc propper 0-255 on both. Again, 16-235 is the propper video range, but it's not going to amount to significant difference actually watching video on screen and potentially limits the range on other more pc related tasks you may do with the machine. I'd prob go for the 0-255 range myself if not dialing in with a meter.
Now with a meter, and this might be just the combination of equipment I am using, I have noticed it takes a bit more work to get 0-255 dialed in propperly then it does 16-235. I dont know why as I can set the range to calibrate in CalMan to get the propper coordinates and all...not like I'm trying to calibrate 0-255 with software targeting 16-235 or anything...but it is harder to dial in on my GT25 for some reason.
Since the ST's dont have THX mode, cinema (if that is an option still) is the best picture mode to use. If you need more control or cant get cinema bright enough for daytime use, then custom is what to go for. All the other modes are worthless on panasonics...except maybe game mode if you want to saccrafice good propper picture for less processing thus lower latency from the set.