I like to take a lot of pictures. Sometimes, when I see a particularly appealing scene, I will take several overlapped pictures with the intent of putting them together into one panoramic image. In the past, I've tried to use Adobe Photoshop CS2 (or other made-for-the-job tools) to assemble my panoramas. My success was... limited:
Notice how you can see every seam?
More recently, I discovered Microsoft Image Composite Editor which Microsoft offers for free. It's not officially supported, and not a complete product; it has few options for the user to manage, meaning that there is no way to correct what it does wrong. That said, it's by far (by far) the best panoramic image compositor I have seen (not that I have seen many). The single most important aspect of its method is, I think, the perspective correction it does on each frame before trying to combine them. Consider the below rendition of the above panorama:
Or this demonstration of a full 180 degree pan, in which I turned the camera on its side to get more vertical coverage:
I have plenty of other stitched panoramas for your viewing pleasure!
Give it a try and let me know what you think!