There are a few companies that are really engineering usable software and to me the big 3 are Microsoft, Google and Yahoo!.
Microsoft developed the Image Composite Editor (ICE) to stitch several digital pictures together. The great thing about this piece of software is that it is nearly 100% automatic!
The above picture was created using Microsoft’s ICE by using 7 pictures that were taken. As can be seen below, the 7 pictures taken were not lined up properly (below) and ICE can automatically align them. However, you have to tell it whether you took the pictures using “Rotation Motion” or “Planar Motion”.
The stitching was done very well with little indication in the final picture of the area where the separate pictures were joined. In the case above however, each picture was taken with slightly different focus and by looking at the focus/blur of the different areas, one can see the stitch area.