I am not the biggest fan of Microsoft Windows in the world. However, I give praise where praise is due. Photo Gallery, a part of Windows Live (I believe that my copy is a part of the upgrades to Windows Live, called “Wave 3”.
Photo Gallery has a feature which allows you to stitch your perfectly overlapping photos (or my not-so-perfectly aligned) photos into a single image. If you are on Microsoft Windows XP (or higher), give it a spin. I believe the address is http://get.live.com/