Race action from a 70-300mm IS and a Rebel XTi.
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1/60, f/5, ISO 1600, mode 1 IS.
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1/40, f/20, ISO 200, mode 1 IS.
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1/250, f/13, ISO 200, mode 1 IS.
IS mode 2 - single-axis stabilization - is supposed to work better on panning than mode 1 two-axis stabilization. But from experience, there's no practical difference between the modes, so the lens stays in mode 1. And the IS is never switched off. Recent use of a non-IS lens has reinforced the value of IS under all circumstances, panning or not.
Getting a sharp panning image is a combination of technique, smoothness and luck.