I keep reading about this over the web but yet to find a solid answer on the subject, specifically about rF2. Are shadows a function of CPU power or GPU power , combination of both or what? If so what would be a good choice of CPU (if that's the case) where shadows would be a non-issue (max everything shadow related) for a build?
It's a combination of both. A rough estimate: CPU usage increases linearly with shadow quality. GPU usage increases with square of shadow quality setting. With high shadow settings it's still reasonably balanced, but with maximum shadow settings GPU usage increases significantly. In general, simplest test is to look if your framerates go up when you give control of your car to AI. If yes, then it means your physics demand for CPU doesn't leave enough for graphics engine to keep up with your GPU anyway.
I assume you reset it, unless the default controller profile for your controller is different. Both with no wheel prior to any setup and with the T500 auto detect, AI is I for me.