Sport mode will cost you gas because the ECU changes the shift points higher for better acceleration. Use the automatic mode and keep your foot out of it and you'll do the best.
K&N filters haven't been proven to get better mileage than stock filters. You do run the risk of contaminating the MAF with excess oil from the K&N. And you'll pay for the fix yourself because the factory warranty won't cover problems created by non-Rover parts.
Keep it stock and let the engine run in for a few K miles. Mileage should improve a bit. 20 mpg in Oahu traffic isn't too bad, me thinks.
