Panoramic shots are good when you want to capture the entire view, you can achieve this using very expensive camera with every expensive lenses. you can also achieve it by using Photoshop. You don't need to do manual photo stitching which is a pain in the ass.

This simple instruction will teach you how to get a panoramic photo effect, from multiple related images you took from you digital camera.

On you open up Photoshop (I'm using CS3) go to File->Automate->Photomerge...



after clicking Photomerge you should get this UI:



Choose the desired options, browse for the multiple image you want to merge, then press ok, that should do the trick.