If your camera has a panoramic assist mode, use it. Many canon cameras do. If not, pick some fixed point, preferrable something vertical (like a tree or building, or lightpole) and put in the right 1/3 of the image, pan your camera to the right and put that same point in the left 1/3 of the image. Repeat.
Try to keep the camera as level as possible when shooting for panoramas. If you've got a tripod, use it. If not, find something stable like a table or railing and use that. You'd be surprised the quality of the panoramas you can get even with a low quality camera. I took a panorma standing on the steps of St. Peters Basilica in Rome of Saint Peter's Square with low quality digital camera (1/3 of a megapixel) that came out great. Just take your time. These are photos that you cant go back an reshoot anytime soon.
You'll need at least 4 frames to do a decent panorama, the wide the area you want to cover, the more frames you'll need. Dont move the camera too little though. All that overlap can confuse the stitching software. Give the software a chance to find the overlap points automatically, then manually adjust where necessary. Sometimes it just doesn't work even when you've done things perfectly.
Have fun!
