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In the File menu, go to Automate and click on Photomerge

Select your images from your file and click OKAY. Photoshop automatically takes over to create the panorama

How I did it - Last Friday evening I went to a baseball game with our two sons and grandson. It was a great evening with low temperatures and humidity. It was an opportunity to take my Nikon D70 and have some fun. The enclosed picture was a series of three hand held (yes you can hand hold) vertical images. I put them together in Photoshop "Photomerge" and corrected the Levels and color saturation. My final step was an Unsharp Mask. Nothing spectacular but a good example what can be done in CS. One tip I can offer. I confirmed the exposure with Manual exposure and exposed all images to one exposure reading.

My latest panorama was a composite of six separate images from Arches National Pak, UT. The view is Delicate Arch photographed from the high viewing area from across the valley. It was shot with a 75-300 mm lens.

Three separate images shot at Comerica Park in Detroit, MI. The camera, a NIKON D70, was handheld and the metering was set on Manual. I metered one scene and used that exposure reading for all three exposures. The image was pre-planned knowing that I wanted to create a Panorama (Photomerge) in Photoshop.