I found this amazing software called Image Composite Editor (ICE) by Microsfot while searching for free software to stitch photos. I found few other free photo stitching softwares too, but they were difficult to install, took lot of time to stitch, and/or producing low-quality images.
Using photo stitching software, you can stitch a set of overlapping photos taken of a location into a single image. Assume that you want to shoot a wide-angled scene with your mobile camera, you can take photos of that scene into rectangular grid of rows and columns and then using photo stitching software, you can create a high-resolution single image.
Microsoft Image Composite Editor (ICE) is available as a free software. It can stitch giga pixels of images into one single image. No other software can match its speed. It is available for both 32-bit and 64-bit windows and supported up to Windows 7.
Flickr has a group for the images stitched with Microsoft ICE, http://www.flickr.com/groups/922872@N23/. Check the photos created with it and you will understand what you can do with this little free application.
For example purpose, I have captured the Microsft webpage into 4 different parts of unequal lengths and stitched into one. Click the below images to see, how good it stitched the images into one.
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This is a photo taken from the ICE group on Flickr as an example for panoramic image created with stitching 14 photos into one:

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