for cs3 go to, FILE, AUTOMATE, PHOTOMERGE.
insert all the picture you want stitched and press ok.
you can also auto correct the colours of each picture so they match, so you dont get the colour difference like in the picture posted above. I've forgotten how to do this though.
I've used a few stitchers including ICE. Ps gave the best results by far, but like I say I always used RAW files as it would stitch them better.