What are the suggested settings to use billboards in my scenes?

It depends on the renderer. These are some tips:

Scanline​

• For shadow maps, use the XShadow plugin.
• For raytrace shadows, be sure to assign the light in the "Shadows" rollout.
• Use "Forest Material" with any material as base.

Mental Ray​

• Always assign the light in the "Shadows" rollout.
• Don't use XShadow plugin. It's not compatible with MR.
• Use "Forest Material" with a Standard Material as base, and enable "Forest Shader" checkbox in FM. This combination enables a custom shader optimized for MR and billboards.
• The "Forest Shader" parameters are found in the "Material" rollout of Forest. Use "Self-Illum factor" and "Irradiance Color" parameters to adjust the illumination of the billboards.

VRay​

• Always assign the light in the "Shadows" rollout.
• Don't use XShadow plugin. It's not compatible with VRay.
• You can use "Forest Material" with any material as base, as VRayMtl.
• Enable the Indirect Illumination (GI) to get the best results.