Olympus camera can only use olympus original SM to enable the function.
Someone in the net have ways to format your 3rd party SM to enable the fuction but you have to search for yourself on the web and it's not applicable to every brand also.
yup there is a way to edit the card header to enable the pano function. Basically just a flag to tell the DC that, hey, this card can do pano.
But I find the pano function a bit useless, so never use it at all. It doesn't have stitch-assist unlike Canon DCs. As for the stitching software, well there are many other there that can do the job. The Panorama Factory is a good one.
The only one possible way to make one SM card with the pano enadle , is to buy one USB ZIO Smart Media reader .
There is some one who have create two files that they can work with the ZIO reader ,and they format any card as Olympus one .
If you think seriusly to get the ZIO reader ,then i will tell you more .