Making panoramas in Photoshop couldn't be simpler, but in order for them to look good, you have to take the pictures right.

First, take a picture at the starting point of your panorama, then for the next picture, make sure include part of the first picture, so that they overlap. When you're merging the pictures, there will be empty spaces if you don't overlap them.

Example:
Spoiler (Click to View)[img]http://img713.imageshack.us/img713/4909/3425.png[/img]

Ok, after you've properly taken your pictures and uploaded them, we can move into Photoshop.

All you have to do is go to File>Automate>Photomerge
Spoiler (Click to View)

Select browse and grab all the pictures you want to use (ctrl + click). I usually use auto mode, but if there is a specific way you want to merge the images, select that. The merging process takes time, so just be patient. After it finishes, you might get white lines that appear and disappear as you zoom. Don't worry about those, they aren't actually there. If there are empty spots on the edges, crop them out. Using a tripod will minimized this. Once it looks good, merge all the layers together and you're done!

Most recent one I've done:
http://i7.minus.com/iwBzMRZ9Yj93E.jpg
Warning Large Image Warning

It depends on the camera you have, but these are usually big files. The one above 11 mb and I lowered the quality. The highest quality is 28 mb. The entire image is 20 feet long.

Anyway, that's how to make beautiful panoramas in Photoshop. I hope you learned something and if anyone takes a good one, post it on this thread, I'd love to see it!