I agree; they all look pretty good from a panning perspective. I think most the background blurring is from motion.
IS Mode-2 is correct.
Like (almost) everything is life, it's a trade off; this time between really dramatic blurring and "keeper ratio".
The slower the shutter speed the more blurring, but the higher the chance of a useless blur everywhere. Also, as you go to lower shutter speeds, you may end up stopping the lens down so far that diffraction starts noticeably softening the image (somewhere around f/11 for an APS-C camera).
Most of the time I'm just looking to get enough blurring that things don't look "frozen".
I usually take a couple of test shots at different shutter speeds and chimp them to see how the wheels and background look.
Shooting bursts also helps. By definition there will always be one shot that's the sharpest.
Also, I'd suggest using AI-Servo focus and shift the AF-Start function button to one of the buttons on the back of camera that are under your thumb (ex. the "*" button). The T2i may already have a dedicated "AF Start" button. Press that before you want to start shooting and the AF and IS will "spool up" so they're both running before the subject gets to the point where you want to take photos.
I just checked:
Custom Function:
IV-9: Shutter/AE lock button
0: AF/AE lock
1: AE lock/AF
2: AF/AF lock, no AE lock
3: AE/AF, no AE lock
Mode 1 is "Convenient when you want to focus and meter separately. Press the
button to autofocus, and press the shutter button halfway to apply AE lock."
Cheers,
Geoff S.