constant ISO, shutter speed, aperture, try not to use auto WB, overlap around 30%, shoot verticals and mount on a tripod. best to have an L-bracket
personally, ive had some really bad experiences with photomerge in photoshop CS2, and if ur shots arent perfect, its not easy to merge
i use a $100 software, and i find it wonderful. compensates for all the flaws in brightness falloff, barrel distortion and sharpening too