Hugin Open Source Panoramic Image Stitcher

Hugin is an Open Source, Cross-Platform application to create seamless panoramic images by stitching. A free and open alternative to RealVIZ Stitcher (now bought by Autodesk).

Go to http://hugin.sourceforge.net and download the precompiled application (OSX, Linux, Windows) or the sources if you know what you are doing.

Added: You can also use if for the correction of perspective, removal of distortion. It can call some external tools for automatic stitching (autopano) and automatic blending (enblend).