I've played around with photostitching sets some and have been underwhelmed with the results, especially considering the time and effort that I expended on it. It's extremely difficult to get a panoramic of anything smaller than room-size, especially when a regular pattern (like Lego studs) reveals any distortions apparent in the stitching.
Generally, when creating a panoramic, here are my rules:
-Use a tripod. If you're serious about it, you need either a levelling base or a panoramic base for your tripod head. (I use and love
Really Right Stuff's Pano Base, but if you're not a photo geek like me the money's better spent out of the Lego budget.) If you're using a pan-tilt head (i.e., your tripod has a handle to move the head from side to side), you'll need to level it using the legs but you'll have an easy job rotating the camera.
-Set the lens as close to "normal" (50mm on a 35mm camera) as possible, but NEVER less than normal. If you set it less than normal, wide angle distortion will "bulge" the center of each frame in the panoramic so that it looks like one of those accordion-style folding screens.
-If you're taking a horizontal panorama, set the camera in its vertical ("portrait") orientation, and vice versa. This keeps you from having a very long and not very high picture.
-Aim for 10-25% overlap between images to give the photostitching software something to work with. Generally, the closer you are to the object being photographed, the less overlap you need (and want).
-Meter to properly exposed the brightest frame in the image and set your camera to manual exposure on those settings. You can recover detail in shadows; you can't recover a blown highlight.
-Set the focus to manual. Panoramics work extremely well at the hyperfocal distance of the lens or at higher f-stops. A low f-stop risks having different parts of the scene out of focus in different frames.
Photoshop CS & CS2 have a stitching feature that's pretty good. It's under File->Automate->Photomerge. Generally speaking I spend 1-4 hours getting a panoramic right, so it's a bit of a painstaking process.
My personal opinion is that stitching would work well for a display or room setup but not for an individual creation. If you're doing one creation, you're better off stepping as far back as your lens on maximum zoom will let you fill the frame with your subject and cropping it tightly to get a panoramic feel.
Carl
"You read the manual, man, and you won't play around with it, not the same way. And you get all funny when somebody else uses it to do something you never thought of..."
William Gibson
The Winter Market
) This is a combination of 12 different images sewn together to make one image. You can see some of the seams, because I wasn't very precise with the camera position and I used a flash. 
If you're interested in doing this yourself, check to see if your camera has any stitching software with it. I've heard about it being done in Photoshop, although I'm not real sure about the procedure. There's at least one plugin for the GIMP available for creating panoramic images.
