Not relishing the difficulty of manually doing the stitching, I looked for a tool that was free and would automatically stitch the pictures together. What I found was a tool called Hugin. It is a little terse, but with practice, I was able to stitch panoramas with ease.
A note of caution here. While the tool can work wonders, it does has it's limits for common point recognition. When taking a series of pictures for a panorama, it is important to have a great deal of overlap from one picture to another. If the tool can't find the points, it will prompt you to find common points. This is an awkward process, but sometimes it works out fine. I'll leave those advanced topics for you to explore on your own.
When hugin starts, you see this:
|hugin start display|
I did not fool with looking up the specs for the lens of my point and shoot. Instead, I opted to enter in the HFOV and let it calculate the other data. Assuming a normal point & shoot digital camera, with no setting modifications, this value is normally 50 degrees. Once you hit OK there, you press 2. Align on the main page, and the program does it stuff. If all goes well, the processing completes and you are presented with the preview screen.
From this window, you can choose the Projection screen to select equi-rectangular to flatten out the picture if desired, and select crop to remove unwanted edge effects. Once those edits are done, close this window, and select 3 Create Panorama, you will be prompted for a few more file names, and tada! you have a panoramic picture in a TIFF format.
It is worth noting that these TIFF files can get enormous, especially if you are merging 14MP images. Once the TIFF is created, the file can be shrunk by using a conversion program like JPEGView to convert it to a JPEG, which will typically shrink the file to less that a few megs. It is worth noting that in panorama stitching of large files with few alignment points, the tool will occasionally exhaust system resources and hang. The work around is to align fewer files, then align those composites in a separate step.
Once you use the tool a few times, the process becomes amazingly fast. For example, I noted the pictures in this example on a friend's album, downloaded them, ran them through the tool, shrunk the results, and had the resulting panorama in an e-mail in a couple of minutes. I invite you to look at the trail guides for some examples of what these tools can do. It is worth noting that the banner panorama at the top of the blog was done manually several years ago from scans of film pictures taken with a 35mm SLR. We've come a long way baby!