This PS3 story uses a set of panoramic pictures made by Windows Live Photo Gallery. The process is the easiest ever, and results are great. Here's the link to get the free app...
download.live.com/photogallery
Each was made by selecting about ten 10-megapixel pictures from a Nikon D40x and telling the app to make a panorama. It did all the figuring out.
Looks like a great tool.
I had to resize the pictures to get them down to the 7200 pixel size limit of PS3.... and of course distort them to make the widescreen story.