I have stitched a few images so far, the successes are all visible on my flickr there are currently 97 there.

All of these were shot off a compact super zoom (Ricoh R7 and CX-1), stitched using the open source Hugin stack and generally with automatic exposure, white balance and focus.

From these experiences I would say that there is really only one thing that matters for creating decent panoramas and that is controlling parallax effects.

It used to be that barrel distortions and varying exposure / white balance wrecked havoc with the stitching process, but newer stitching software can readily deal with these complications. Leaving only the parallax artifacts.

Parallax artifacts are a function of how you rotate the camera while taking the images. If you rotate the camera wrong then the foreground and background won't move together. You can test for this by aligning a foreground and background object, rotating the camera and checking if the two are still aligned, if they are not then you will have parallax problems.

There are two ways to address parallax issues, the first is to take images that consist entirely of distant objects. The second is to take the time and effort to figure out how to rotate the camera correctly.

The key to rotating the camera correctly is knowing the location of the entrance pupil. If you search online you will find many references to the forward nodal point, this is incorrect, the important point is the entrance pupil.

To rotate the camera correctly for a stitched panorama you must rotate it around the entrance pupil.

The entrance pupil is the aperture as viewed through the front of the lens. Often you can see this just by looking into the front of the lens. It is the narrowest hole visible inside the lens.

On a wide angle lenses that hole will appear to sit somewhere between the front of the lens and the camera body. On wider lenses the entrance pupil will be closer to the front of the lens. When my CX-1 is set to it's widest the entrance pupil is roughly 22mm in front of the tripod mount.

On telephoto zoom lenses the entrance pupil will be behind the camera body. When my CX-1 is set to maximum zoom the entrance pupil is over 30mm behind the tripod mount.

However knowing the location of the entrance pupil is not enough, you also need to reliably rotate the camera around that point. For a single row panorama this is relatively easy, I get by with this rig. For multi row panoramas you will need a full panoramic tripod head like the Nodal Ninja. It is worth noting that most of these heads are designed for wide angle lens.