6. Reposition. This setting simply positions photos so that they're in roughly the right location, without scaling or rotation. This restriction makes it much harder to line up every element in the photos, so errors are even more apparent than with Collage. Consider this option only for open vistas and other scenes where finer details (signage and power lines, for example) aren't a factor.

7. Interactive Layout. (Default in Elements, downloadable for CS4/CS5). This setting allows you to have a measure of control in the construction of the panorama. Once the application has assembled a rough composite, you'll be able to choose between two layout methods: Reposition Only and Perspective. Reposition Only is notable because it actually blends photos together with greater accuracy than the previously mentioned Collage and Reposition options. Perspective offers a new wrinkle: the ability to manually set the vanishing point. Choose the vanishing point tool and click the canvas in the desired spot, and within seconds the image will warp around that point. And with either method, you also have the option to rotate any photo in the panorama (though you will likely never need to use this option).

The completed panorama can be breathtaking, but you'll need to crop it tighter to eliminate the irregular edge.

Source, predictably, lets you select the photos to use in your panorama. Choose Folder from the Use pop-up menu and then click Browse. Choose the Panorama folder you created and click Open; you'll then see the list of photos appear in the source field. Just below the field, you'll also notice three options: Blend Images Together, Vignette Removal, and Geometric Distortion Correction. The first option should always be checked, but you'll only need to invoke the other options if your photos are prone to dark corners (vignetting) or warping at the edges (which can happen at the widest angle of some camera lenses).

Click OK to create your panorama, and you'll soon be presented with an amazing panoramic photo. However, the completed panorama will have irregular, transparent edges. (Photoshop Elements will ask if you want to fill in the edges, but it doesn't do a very good job; moreover, with larger panoramas, it's likely to give you an out-of memory error.)