It's been a while I stopped using hugin, an open source panorama stitching tool, because it crashed all the time on me and it was unclear how to work with it.
I just downloaded the latest release (an ominous 0.6.1), and they somehow got it to work just fine! I am impressed! Download it from here
Use is a bit of a problem on first try. You install the application, start it, then add a bunch of pictures that can be stitched together. Now you select two subsequent pictures from the tabs. Select a point on the left, then the corresponding on the right, and then right mouse button: voila!
When you are done finding all the control points you want, you go to the Stitching tab and say: start stitching. Save under a new file name, and you are ready to go!