I used to own an Olympus point and shoot camera that has this panaroma function on the camera. But you still need the Olympus provided software to do the stitching. It is quite troublesome as you need to tell the camera that you are going to take panaroma shots and it only works when you use Olympus memory card. The only advantage is that the camera will provide some guide on the portion where you need to overlap.
It is easier to simply use third party software. No dependency on having to preset on camera. I use CS2 to do the stitching.
My K800i phone camera can do inbuilt stitching! But I believe it is always more accurate to do it on the big screen at home. Especially tricky scenes where the software might not get it correct automatically.