beamer: you raised a good point about us 'colonials' saying "we are declaring an emergency" versus "Mayday". I really don't know how this started and why we such have a hard time declaring "Mayday". I was taught that declaring a mayday meant that if you did not receive immediately help you were going to crash or that you were crashing and ATC needed to notify the ASR folks. Anything less than that, one just said "I am declaring an Emergency at this time." Meaning I require priority handling and a clear runway wherever I can land.
"PAN PAN" I understood to mean that, 'I have a problem, I don't know how bad it is, I will let you know but please keep an eye on us." In my thinking (which certainly can be flawed) I am notifying ATC that my problem is not yet serious, that we might be able to fix the problem or we may have to 'declare an emergency' later.
In thinking about this I have come up with some thoughts of why we have this problem, if it is really a problem. Machismo, don't want to sound like the little boy crying wolf, in other words, we are so tough we can handle anything. There is flight instructor where I take recurrency training that has a great saying about being too brave in an airplane, " If you're going to be stupid you better be real tough, because sooner or later you're going to hurt yourself real bad and you got to be able to handle the pain!"
I have flown with some pilots that will not declare an emergency damn near no matter what is wrong. They seem to think it is a challenge to their manhood to admit there is something they can't handle, probably get this from Hollywood. Once back when I was a FO on the 72 I had a captain that did not want the crash equipment rolled out when we had an un-safe gear indication on one of the main gear (I can't remember which gear now). The tower controller had the equipment come out anyway. Oh yeah, we had around 180 paxs on board. Another excuse is "Oh, I don't want to have to fill out a lot of paperwork if I declare an emergency." By the way, here in the U.S. you don't have to fill out any paperwork for declaring an emergency unless you do have an incident or accident or if ATC has to move a lot of aircraft out of your way and need a reason for their own paperwork.
Anyway good question and as someone said earlier we need to get some ATCOs into this.