The best way to start a panorama is to HAVE A TRIPOD!
Then you want to set your camera on MANUAL not Automatic settings. The shutter speed, aperature, and zoom all need to be manual. Once you set it for the best lighting, you wont change any of these settings for any of the photo's in the series that you want to stitch into a panorama.
Then you take the pictures! Go crazy, photograph a full circle if you want! But remember, you have a tripod for a reason... keep it level so your camera will be level, and in turn, your photos will be fairly level. **One hint: make sure you overlap in the view finder. When looking through it, make sure at least one-third of the last shot is included in the next one.
Then take your pictures to your computer, and you let photoshop do the rest! All you do is go to *file, *automate, *photomerge.
For beginning panorama creators, it's best to use the auto setting once the photomerge screen opens. After you get comfortable with that, then experiment with others. But for now, just keep the Auto setting selected.
Click the 'browse' button, and find all the files that you shot to be a panorama. (TIP: .jpg's are the best file type to use!) Let photoshop load them into photomerge, and click ok. Let photoshop do its work!
And voila! You have a panoramic image!
*** For the three images above, I created them from three separate panoramas, then in the photomerge I used the 'reposition' setting at the left, and un-checked the 'blend images together' so I could go in manually and erase sections of images I didn't want. ***
For the image below, it's just a basic panorama, but possibly longer than expected.
Remember, panoramas don't neccessarily have to be horizontal. They could be vertical, or even multiple layers, and odd shapes. It doesn't have to be just one row of photos!