Not sure about PSE 5 but you can definately do it easily with PSE 6 or 7, there are also loads of free open source tools available such as Hugin
These shots were all taken using my E510, handheld in portrait format. I simply rotated carefully around my feet and took care to move the camera in a constant horizontal plane. Make sure the camera is in maual mode and white balance and focus are all constant for all of the pictures or you will get stripey panormaics.
http://www.flickr.com/photos/jamesfletcher/3404862639/
http://www.flickr.com/photos/jamesfletcher/3339192600/
http://www.flickr.com/photos/jamesfletcher/3338002903/
You don't need speciallist equipment (or a tripod at all) unless you are planning to shoot very complex panoramas with close foreground elements where you need to avoid paralax error.