As a USA VATSIM flyer, when I fly the Duke with the KNS81 I like to try to use named waypoints when possible. As for which are legally allowed, the KNS81, I think, is only allowed to use Victor and Jet Airway waypoints, no T or Q airway points here. Reason being that V and J points are based on VORs while T and Q are pure GPS required points.
Also, legally, you cannot fly any SID or STAR that requires GPS. They'll usually say so on the chart, or skyvector says which ones are RNAV. They'll have (RNAV) after the name whereas non-rnav sids and stars will not say RNAV after their name. One example i regularly use is the Bradley6 departure from KBDL. Let's say you want to go to VEERS. You get out little navmap and you find a VOR that overlaps KBDL and VEERS and then little navmap lets you draw a line from the VOR to VEERS that will give you a bearing and distance. You then put that in the KNS and it can setup its pseudo-VOR for you to fly to VEERS once in the air.
Also, yes, according to Gemini you can use VOR/DME points and even latitude/longitude waypoints, but I like to make ATC's life easier and pick named points because I don't know if vatsim is setup for those kinds of points like IRL ATC's software is.
As for equipment code. In USA, I use /I when using the KNS in Duke. It stands for "RNAV, NO GNSS, NO RVSM". /A is pure vor nav. /Z would be rnav, no gnss above FL290. (/w would be pure VOR only above FL290. I do that is the F28 when doing vor nav only)