A Panel Filter is the same style of filter thats already in your car...
Not sure about the sound coz I put a pod filter in my EA n that gives better sound when reving over 3000...
So if your going to stick with the panel filter do like what you said get a K & N panel filter n a XH snorkel.
Don't cut the lid there is real need with a panel filter.
1998 EL Fairmont Ghia in Burgundy, Tickford enchenced, Leather Int, Lowered with White Line Works Kit, 17" ROH hi polished rims. AU XR snorkel.