As the owner of a brand spanking new Canon SD1000, I unpackaged the included software and found a nifty tool called PhotoStitch.  The camera itself only provides a special function which assists you in providing overlap between successive images of a panorama. The magic of the stitchery is in the desktop software.

PhotoStitch does a descent job, given its design parameters: it is intended to do the stitching largely unaided.  Hugin, an open source tool for creating panoramas, requires that you specify the alignment control points.  Although seemingly daunting, the task is actually extremely easy.

As one majoring in computer vision, I should understand the algorithms a little better – to be able to compare the two on an algorithmic level.  What is clear, subjectively, is that Hugin is just more powerful. If it makes a mistake, i can go back and add a couple more control points and out pops a better alignment.  Here below is a sample of output from PhotoStitch (software from Canon) and Hugin (open source software).

PhotoStitch

Hugin