WWW - great advice.
The way I know it is that you call a Mayday when the a/c is in danger (be it structural, instrumental, or hijacked etc) and a Pan when its not (sick pax, another a/c spotted going down, and even includes spotting fires etc on the ground or at sea!!!)
Doing this enables the controller to identify an a/c needing IMMEDIATE attention as it could go any minute, or otherwise one that will stay up but needs priority.